The present application is directed to the preparation and use of a class of nanoparticles called Quantum Confined Atoms or QCA's. A QCA is a particle of material comprising a plurality of host atoms in a nanoparticle of a size of less than 10 nm with a single atom of a dopant (or activator) confined within. The QCA's have unique luminescent and optical properties and thus can act as a very efficient nanophosphor which generate polarized light and can operate as a laser and a nanomagnet. An anti-agglomeration coating surrounding the nanoparticles can prevent clumping and loss of the enhanced properties.