Where does interstellar dust come from? How does it form?

Answer: When a star dies off, it releases a huge amount of interstellar dusts from the explosion of its outer layers, ranging is size from molecule-like to only about a few micro-meter. The materials are then back into the space.

This materials again gets accumulated in the space, forming a cloud and subsequently forms a new star. This process keeps on repeating, maintaining a cycle.

This is how the dust particles keeps on transforming from one star to another.