Lesley Concannon (32), a fitness and Zumba dance instructor, and her husband Kevin Barry Concannon (39), an unemployed shop manager, have been charged with possessing the explosive PETN with intent to endanger life or damage property, or to enable others to do so.
Lesley Concannon moved to Northern Ireland two years ago from Charleston, West Virginia, and she and her co-accused are the parents of a 16-month-old girl.
The couple is also charged with possessing articles for use in terrorism, namely a propellant consisting of magnesium ribbon aluminium filings and a de-activated Yugoslavian M56 sub-machine gun and a magazine in suspicious circumstances.
During a bail application for Lesley Concannon, solicitor Joe McElhinney revealed that she first came to Northern Ireland on holiday with her father three years ago. During her visit to the country she met her future husband.
Mr McElhinney said his client "had a romantic novel published based on her relationship with her husband".
Kevin Barry Concannon is also charged with collecting information likely to be of use to terrorists – taking 22 photos of the Merseyside Police Headquarters in Liverpool last year. Both defendants deny the charges.
A detective told a special sitting of Londonderry Magistrates Court that 130 grams of PETN explosives were found in a coal bunker at the rear of the couple's house wrapped in cling film.
"PETN is one of the most powerful explosives, of military grade, similar to Semtex," he told District Judge Barney McElholm.
The officer said the defendants' house was searched last Monday as part of an investigation into the discovery of four mortar bombs while they were being transported across the border from Co Donegal into Derry on March 3.
The officer said PETN could be used either as an under-car booby-trap bomb or for manufacturing pipe bombs and it could also be used as a powerful detonator for a larger bomb.
He said a number of empty ammunition casings were also found wrapped in cling film in the coal bunker which were similar to those used by the paramilitary group Republican Action Against Drugs for so-called punishment shootings.
The detective sergeant said during a second search of the couple's house two days later, the police found the sub-machine gun, smoke grenades and a pyrotechnic thunder flash.
On a laptop found in the house, the officer said police discovered 30,000 search requests. One request stated "Can I take a gun on to a plane".
Kevin Barry Concannon made no bail application. Both defendants were remanded in custody.