To my understanding, Dymondwood is laid down in thin veneers which are filled with a resin. It's almost like "wood micarta," using natural wood instead of cloth or paper as the supporting medium, though the wood is a larger portion of the makeup and is substantially less tough. It's all the same kind of wood, too, just dyed all kinds of colors (though I've been going nuts trying to find out what sort of wood - I knew once).
Stabilized materials, on the other hand, are left as solid blocks of natural woods or other materials they are filled with resins and preserving agents. I have no idea how it penetrates so thoroughly, but from what I hear it certainly does. this leaves the natural figure or texture of the material in place throughout, on thing that Dymondwood (much as I love it) can't match.
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-Drew Gleason
Little Bear Knives