Trivia: SPOILER! Do not leave after credits! There is an extra scene with Caine walking toward his daughter. Akira approaches him with a knife for vengeance. Fade to black.
Trivia: Wesley Snipes was offered a role in the film, supposedly as a swordsman, but the two sides could not come to an agreement.
Trivia: Keanu Reeves only says 380 words throughout the entire film.
Answer: These are dragon's breath shotgun shells. The shells are filled with magnesium pellets and ignite when fired. The film seems to exaggerate the stopping power, making it seem almost like an explosive round rather than incendiary. These are not the same rounds that we see the men carving into. Carving grooves into a bullet is done so the bullet expands upon impact and causes more damage similar to a hollow-point round, though the effectiveness of this method is debated.