Through force of will and mind, humans can harness the innate energy of the world, Mana, and manipulate it for dazzling effects. But like all the tools in the Sandman's arsenal, it has its flaws. Magic, if witnessed by the public, can cause mass doubt of the Dream, and amplifies the effects of reality quakes.
The exact nature of Magic is up to debate. Although the mana level of an area has no discernable effects on psi powers, it's believed that the two phenomenon are somehow related. Devices used to detect latent psychics will detect a sudden spike in energy, spread across the entire area, if a spell is cast in the same area. Because of this, there are several theories that connect magic and psi, explaining one as an aspect of the other. However, since psi mind shields are useless against mind-reading spells (and vice versa), these theories have not generally accepted by the rest of the Project.
There is also the question of the Anomalies. In certain situations, the use of magic can cause an unusual being to take form. This being, apparently made from pure mana, appear to be intelligent and sometimes communicate with the Sandmen in the area. However, an anomaly is almost always hostile, which has prevented most attempts to communicate or study them. The anomalies can be dissipated by physical trauma, especially with blunt weapons. They also apparently use the mana that makes up their physical form to power spells, causing them to dissipate naturally.
Mana levels in an area can fluctuate, sometimes wildly. High mana levels can be found in areas with dense populations, and at the same time in desolate places, such as the top of snow-capped mountains or abandoned ruins. Mana levels are lower in reality subduction zones, especially after reality quakes. This can case a turmoil of high and low mana levels in cities in reality subduction zones like New York, with levels going up to 50 mp/s (very high) and suddenly down to 1 or 2 mp/s in seconds.
It is believed that Reality B lacks magic, both to the effect reality subduction zones have on mana levels, and because retrocreated irruptors appear to lack any knowledge on the nature of magic. Because of this, Magic is one of the most powerful tools in the Sandman's arsenal. However, some Sedu forces have been discovered with prototype devices that act as mana damperners, invented after Irruptors were retrocreated into the Dream. This, combined with its reality weakening effects, limits the use of magic in conflicts.