Formaldehyde (main ingredient in Formalin) is a potent disinfectant and anti-bacterial agent but has little to no effect as a fungicide, insecticide, or larvacide. Formalin is effective for gill flukes, surface infections, and other parasites, but won't work on argulus, fish lice, and other macro-parasite. Also, it has no bearing on mold and fungus-related problems. I do use it to treat fish with flukes so that once the fluke is removed, the tissue is then filled with the Formalin which then resists secondary infection.
Use caution, though, when using Formalin as Formaldehyde “kills†bacteria in an unconvertional manner. Most anti-bacterial/germicidal agents poison bacteria and germ cells. Formaldehyde, though, "kills cell tissue by dehydrating the tissue and bacteria cells and replacing the normal fluid in the cells with a gel-like rigid compound.
"Tissue and bacterium cells are made of protoplasm and as such, contain large amounts of moisture. The introduction of formaldehyde into the tissue dries out the protoplasm and destroys the cell," says Thomas B. Waltzek M.S. and Ronald P. Hedrick Ph.D. "Additionally, the “new†cell structure will resist further bacterial attacks as its composition now contains a formaldehyde-based compound."
Most anti-bacterial agents (such as tetracycline) poison bacterial infections and are then flushed from the system but Formalin is retained in the tissue.
HTH, Marcye