When a magnetic substance is heated then it  

A magnetic substance loses magnetism on heating. 

Magnetism is the macro level manifestation of the organised alignment of magnetic moments at the level of domains, which in turn can be traced to the orbital momentum of electron around the nucleus. 

As the material is heated above a certain temperature, the electrons in higher energy states cause disruption to this organisation and the ensuing randomness is manifested as loss of magnetism at the macro level.