A method and system for providing a current confined magnetic element is disclosed. The method and system include providing a pinned layer, providing a nonmagnetic spacer layer, and providing a free layer. The nonmagnetic spacer layer resides between the pinned layer and the free layer. The method and system also include sputtering a current confinement layer. The current confinement layer includes an insulator and a conductor that are immiscible. The conductor forms a plurality of nano-dots in an insulating matrix. At least a portion of the plurality of nano-dots extends through the current confinement layer.