We define a special matrix multiplication among a special subset of 2Nx2N m
atrices, and study the resulting (nonassociative) algebras and their subalg
ebras. We derive the conditions under which these algebras become alternati
ve nonassociative, and when they become associative. In particular, these a
lgebras yield special matrix representations of octonions and complex numbe
rs; they naturally lead to the Cayley-Dickson doubling process. Our matrix
representation of octonions also yields elegant insights into Dirac's equat
ion for a free particle. A few other results and remarks arise as byproduct
s. (C) 1999 American Institute of Physics. [S0022-2488(99)03108-4].