Ask your friend for his source of information this issue and look for details. Possibly just opinion.

I have never found, "They say or I heard" groups.

There is a possibility of magnetic material in the “ballast' or maybe local dirt was used which could have magnetic particles in it. I have seen this issue inMRR magazine articles over the years when some people attempt to use local dirt and do not sift the material with a magnet.

Rich

I thought the point of the magnet was to remove any ferrous particles from soil or gravel, etc. collected from the outdoors.  If there were charged particles in the "gravel" they would either be repelled or attracted depending on the charge, not?

You don't want any of this sort of debris to be attracted by OR to, the motors and electronics in locos!

Real rock ballast interfering with the DCC signal sounds like an urban legend if I ever hear one. For starters, the signal travels through the rails, not through the air, so how anything "near" the signal could affect it in any significant measure is really reaching. Also, a regular pulsing signal will tend to be affected by objects with symmetry (if at all, and that's a real stretch, even). Ballast is a random pile of irregular particles, so how that could affect anything is beyond me.

Some rocks are conductive (a bit). I suppose, that really conductive rocks might do something to the DCC signal on the tracks, but it's hard to imagine anything other than copper ore being conductive enough to create a real problem in this area.

Charlie

  That is quite a load of stone someone is slingging around on you. I used real sand from my companies sand and gravel pit on my modules with great success. I used screened stone sieved to size for ballast and freight car loads. Like someone has suggested before. Run a good powerful magnet through it first. If the stone is washed and dried by a sand screw or log washer there will be less metal in it but it still will contain some metal dust. Never microwave your dirt or gravel. You will have a lazer light show inside your microwave. I work for a large sand and gravel producer as a mechanic and can tell you that there is tons of metal in our finished products. Bucket, jaw dies, chutes, and any other metal object wears from the material sliding and grinding over it. We get on average 3 months out of our cutting edges on our loaders. All that metal ends up somewhere. Most gets washed out with the silt and other waste.

Thanks to all who answered my post.  I was pretty sure there wouldn't be any problems but I wanted to hear from others who may have had some experience with this subject.  Thank-You Very Much!!!