The present invention is a furnace for burning pelletized or particulate fuel. The furnace has a split auger located within a serpentine fuel conduit which controllably feeds pelletized fuel into a contained burner, wherein the fuel is exposed to fire and a forced air plenum. The fuel is contained within the burner and exposed to high temperatures until the fuel is sufficiently burnt to pass through apertures in a perforated baffle. Further combustion is achieved by passing the heated combustible gases through multiple combustion chambers. A heat exchanger passes air by the multiple combustion chambers, thereby collecting the produced heat, and distributes the heated air into residential or commercial air circulation systems.