Last month it was explained how the Ambrosia Beetle damages green logs and lumber. For air and kiln dried lumber there is another bothersome pest: the Powder Post Beetle.
There are two closely related families of this beetle; the "bostrychidae" and "lyctidae", and it is this latter that does most of the damage in the U.S. The tell-tale signs are the 1/12th to 1/16th inch diameter pinholes in the sapwood; and when active, the little piles of flour-like wood residue.
It has been my experience that "wany" or live edge boards with the bark left on attract the critters like flies to sugar. The larvae and sometimes the beetle feed on starch which is stored only in the sapwood parenchyma cells. They prefer hardwoods with large pores like Oak and Hickory because it is easier to deposit their eggs. However, they can deposit eggs in the cracks and crevices of small-pore hardwoods and can attack softwoods as well. There can be repeated infestations and the wood can be riddled with tunnels without much external evidence. Once there, it is tough to get rid of them. Introducting steam at 135 or kiln drying @ 180 degrees can be effective.
My reference book that was copyrighted in 1949, 1964, and 1970 describes some extremely nasty chemicals for soaking the wood and even nastier chemicals for fumigation. I won't bother to list those and it seems a more sane approach might be 1) to avoid leaving bark on lumber, 2) seal the wood as soon as possible after working it, and 3) inspect your wood inventory, rip out any infested sapwood and burn it.