Composites and methods associated with the same are provided. The composite structures are formed of quantum dots and magnetic nanoparticles. The structures may be coated, for example, with a non-organic shell such as silica. In some cases, the shell may be functionalized or derivatized to include compounds, atoms, or materials that can alter or improve properties such as water solubility, water stability, photo-stability and biocompatibility. A reverse microemulsion process can be used to form the coated composites. The composition and other characteristics of the composites may be controlled to provide desired magnetic and optical properties. The structures may be used in a variety of applications including biological labeling, magnetic resonance imagine (MRI) and drug targeting, amongst others.