Magnetism is the result of electric charges in motion. An electric current flowing through a coil of wire acts just like a magnet. This has been thoroughly understood since the days of James Clerk Maxwell, who worked out the math almost two centuries ago. In fact, Maxwell demonstrated magnetism, electricity and light are all really manifestations of the same thing and intimately related by a set of just 4 very elegant equations.

http://en.wikipedia.org/wiki/James_Clerk_Maxwell
http://en.wikipedia.org/wiki/Maxwell%27s_equations

I suggest you read the Wiki articles and inform yourself, this really isn't rocket surgery. It's college sophomore physics, and although it may all seem new and mysterious to you, it's been very thoroughly explored ground for a very long time now.