Nicotine by Menny Lindenfeld

The magician borrows a bill from a spectator who signs it for later identification. He places the bill in an envelope and removes a cigarette box from his pocket. The spectator chooses any cigarette and their initials are written on it. The cigarette is also placed inside the envelope. The envelope is then set on fire, completely burning it and the enclosed bill and cigarette to ashes.

The magician picks up the marker, removes its lid and shows that the signed cigarette has mysteriously appeared inside! He breaks the cigarette in half and shows that there is a rolled-up bill inside! The spectator himself removes the bill, unrolls it and finds his intials!