This is a very distinctive moss, as I am sure you have noticed, due to it's unique capsules.
The capsules are believed to be shaped in this manner to aid in spore dispersal. Whenever a rain drop hits it, spores would be emitted from the capsule in a cloud that can reach as far as a few centimeters.
The perichaetial leaves, the leaves which surround the base of the capsule, of Powder Gun Moss are lawn awned and also quite distinctive.
The vegetative leaves are not quite as showy, and are no doubt overlooked by even the most keen observer. Their blunt leave apices (leaf tips) separate this species from the other North American species, Diphyscium mucronifolium, which is found in the southeastern United States. Diphyscium mucronifolium is an Asian disjunctive species.
Powder Gun Moss is found throughout Eastern North America, as well as parts of Western North America. Keep an eye out for it on soil banks and soil on forest floors.