Tinder Fungus (or more proper Amadou) is the name given certain species of fungus that grow in a shelf like formation on old trees. It is used as a punk to catch the spark for flint and steel. Then the ember is transferred to the tinder. It was also used to stop bleeding, and as a strong purgative. Larger pieces can be used as razor strops, and the Sammi people are said to use it for a moxia (you don't want to know). After tobacco came into use, it was common in Holland to keep a small brazier of smoldering Amadou in the house for a ready light.

Preparation
Here's the traditional method for preparing Tinder Fungus for flint and steel.

Take a large iron pot, and almost fill it with the fungus. Add strong urine to cover the fungus. Boil gently for three days and nights, adding urine as necessary. Drain and dry.

A more convenient method is to boil the fungus in a solution of saltpeter. Try to get Potassium Nitrate rather than Sodium Nitrate. The Sodium Nitrate is hydroscopic, and the tinder fungus prepared with it works poorly in damp weather.

Use
Just take a scrap of the tinder fungus and hold it on your flint, just back from the edge. Strike down the edge and skate a spark into the tinder fungus. With just a little practice, it will catch almost every time.

The use of fungus in fire making is very old. I've seen more than one report of fire making kits composed of fungus, tinder and iron pyrites in Neolithic sites.

Finding It
The species is called Polyporus igniarius, a related species; Polyporus fomentarius is also used. The common names are "touchwood" and "German tinder" or "soft amadou". They do not occur in North America, but there are several related species that grow on trees such as the birch (called "Chagga") which makes a good coffee substitute as well as a great spark catcher. They are all shelf types. See what is in your area and try them.