What is placed inside the flag at a military funeral?

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Three shells taken from the volleys fired during the 21-gun salute at a military funeral traditionally are placed into the folds of the ceremonial U.S. flag.

The Ceremony

An honor guard or military detail, whether it is from the local American Legion, Veterans of Foreign Wars post or a detail sent from a local military post, is present for the burial ceremony and will carry the coffin to the grave and perform the honors, including the gun salute and flag presentation.

21-Gun Salute

Three volleys of seven men firing their rifles is the highest honor after the flag on the coffin available to deceased veterans.

Tradition

The tradition for many military details and honor guards is to place three of the 21 spent shell casings inside the folded flag to show forevermore the deceased and his flag have had proper military honors. Nothing else is to be placed inside the flag.

Cost

Military honors for the honorable are provided to the family at no cost.

Shells Not Always Inserted in Flag

Shells are not always placed into the folded flag, as not all military honor guards pick up the spent shells to place them inside the flag. This is especially true when the 21-gun salute does not take place, for whatever reason. If there are no shells for the flag, tradition is to not place anything else with the flag.

Source:

VFW Post #6310: Honor Guard

Military.com: Military Funerals–Honoring the Honorable