What molecular changes occur inside solid Electromagnetic materials? It is a very elementary question to ask, but could not understand the inside picture. 
What happens inside a transformer material at an atomic/ molecular level when magnetic flux changes? (i.e., while EMF is being produced as a reaction?) 
What exactly changes, where do the changes occur? In the nucleus? In $s,p,d,f$ electronic orbit nuclear distances or speeds?
Please give a reference of the internal picture. (I am clear about what is happening in the coils outside.)
 A: Transformer cores are typically made of laminated electrical steel, which is not steel (iron with carbon) but iron with a few percent silicon. This material has a narrow magnetic hysteresis loop because the magnetic domain walls are very mobile. When an external magnetic field is applied, the domains that are aligned with the field will grow at the expense of the other domains. This causes a large induced magnetic moment in the transformer core material.
This moment is mostly due to unpaired spins of the iron $3d$-electrons. Each electron is a small magnet, when they are aligned as in ferromagnetic materials, this produces a large magnetization. Normally this is just in a small area, a magnetic domain, with sizes of micrometers. When the directions of domains are random, there is no net magnetization, no field outside the material.
There are no changes in the nuclei. The only thing that happens in an applied field is that the spins of electrons get turned around. This gives some torque because of conservation of angular momentum, the Einstein-De Haas effect.
