A bio-fuel furnace for use in waste management, non-combustible particulate collection and useable energy production. The bio-fuel furnace includes a combustion unit, a particle separator, an airflow management system. The combustion unit includes a modular ceramic core of stacked cylindrical sections, which store thermal energy. The stacked core sections form an internal combustion chamber and an expansion chamber. The airflow management system regulates airflow through the combustion unit and the particle separator forcing super heated ambient air into the combustion unit and drawing exhaust air from the particle separator to precisely control both the combustion process and the storage of useable thermal energy. The airflow management system includes a series of preheat coils wrapped around the ceramic core, an inlet fan which forces ambient air through the coil into the combustion unit and an exhaust fan that draws exhaust air through the separator and from the combustion unit.