According to the Biopharmaceutics Classification System (BCS), both Class II and Class IV drugs have poor solubility. As per the Noyes–Whitney equation, which describes the relationship between particle size, diffusion layer coefficient, and drug saturated solubility, reducing particle size is a promising way to improve the dissolution rate. However, when the particle size is reduced, particles become cohesive and do not flow well, which affects unit operations like blending, tabletting and leads to problems like lack of content uniformity resulting in significant loss of revenue. We are developing tools to improve flow of such powders through surface modification methods, which may be dry coating of original poorly flowing powders with nano silica (physically altering the surface structure), surface treatment (chemically altering the surface structure) or continuous grinding and coating techniques. In this work, in order to increase the dissolution of drugs while maintaining the flowability of drugs, nano-size guest particles are coated on the surface of drugs (host particles) through a novel approach of simultaneous size reduction and surface modification by using Fluid Energy mill (FEM) is applied to enhance the flowability and solubility of API. The major novelty here is the simultaneous coating and size reduction and use of super-hydrophobic materials such as Leucein for surface modification. As shown below, we can achieve free-flowing well-dispersed particles of APAP (Acetaminophen) in size range 1-5 microns, where the API loading is over 95 %. This can have applicability to inhalation drug delivery.