One of the challenging problems in modern magnetism is the description
of the paramagnetic state because at finite temperatures the effect o
f spin fluctuation plays a fundamental role in altering the electronic
structure. In magnetic metals, the magnetic properties are linked to
the underlying spin-polarised electronic structure in a highly complex
manner. In recent years, first-principles electronic structure theori
es based on the spin density functional (SDF) theory have been able to
provide a quantitative account of many ground-state magnetic properti
es. In this article, the effect of spin fluctuation on the spin-polari
sed electronic structure and thus the magnetic properties will be disc
ussed and its incorporation into ab initio calculations explained. If
the magnetic and compositional ordering energies of magnetic metallic
alloys are close, the compositional and magnetic correlations can prof
oundly influence each other. A theoretical formalism for treating thes
e correlations within the framework of a first-principles electronic s
tructure theory will be elaborated and the application to a number of
magnetic alloys discussed and compared with experiments.