Abstract: A wood pelleter production system for wood chips and the like, having a wood chip infeed deck with integrated dryer deck with an array of inverted louvers that allow air or heated air and flue gas mix to flow up through the chip flow. The chips flow from the infeed dryer deck to a hammer mill to refine the wood chips, the wood chips are transferred within a re-circulatory airflow system, to a refined wood chip dispenser, for consistent delivery and monitoring of the refined wood chips to a chip pelleter. Below the pelleter is a pellet cooling means that cools the pellets as the pellets collect and are drop through a cycling grate onto a pellet transfer means with airflow screens for separating wood fines into a re-circulation airflow system which includes a means for separation of wood particles, wood fines and dust from being released into the atmosphere.