The production of μ-particles of Metamagnetic Shape Memory Alloys by crushing and subsequent ball milling process has been analyzed. The high energy involved in the milling process induces large internal stresses and high density of defects with a strong influence on the martensitic transformation; the interphase creation and its movement during the martensitic transformation produces frictional contributions to the entropy change (exothermic process) both during forward and reverse transformation. The frictional contribution increases with the milling time as a consequence of the interaction between defects and interphases. The influence of the frictional terms on the magnetocaloric effect has been evidenced. Besides, the presence of antiphase boundaries linked to superdislocations helps to understand the spin-glass behavior at low temperatures in martensite. Finally, the particles in the deformed state were introduced in a photosensitive polymer. The mechanical damping associated to the Martensitic Transformation (MT) of the particles is clearly distinguished in the produced composite, which could be interesting for the development of magnetically-tunable mechanical dampers.