A pellet stove, having a pellet hopper, a combustion chamber, a heat exchanger and a pellet movement assembly, adapted to move the pellets from the hopper into the combustion chamber. The pellet movement assembly is located and configured so as to be heated by exhaust gases from the combustion chamber and the pellets spend a sufficient amount of time in the pellet movement assembly, where oxygen is prevented from freely flowing in, so that the pellets are torrefied during transit to the combustion chamber.