Abstract: Molecular dynamics simulations are carried out in order to Study the atomic structure of crystalline component of nanocrystalline α-Fe when it is consolidated from small grains. A two-dimensional computational block is used to simulate the consolidation process. All the preset dislocations in the original grains glide out of them in the consolidation process, but new dislocations can generate when the grain size is large enough. It shows that dislocations exist in the consolidated material rather than in the original grains. Whether dislocations exist in the crystalline component of the resultant model nano-material depends upon grain size. The critical value of grain size for dislocation generation appears to be about 9 nm. This result agrees with experiments qualitatively.