The present invention is an apparatus and method for producing nano-scale tubes and particles. The apparatus comprises novel electrodes for use in arc discharge techniques. The electrodes have interior conduits for delivery and withdrawal of material from the arc region where product is formed. In one embodiment, the anode is optionally made from more than one material and is termed a compound anode. The materials used in the compound anode assist in the reaction that forms product in the arc region of the apparatus. The materials assist either by providing reaction ingredients, catalyst, or affecting the reaction kinetics. Among other uses, the inventive apparatus is used to produce nanotubes and nanoparticles having a variety of electrical and mechanical properties.