A method for reducing cure shrinkage of a thermoset resin includes forming a plurality of surface modified nanofibers. The surface modified nanofibers are formed by soaking nanofibers in an oxidizing acidic solvent. An oxidizing agent is added to the soaking nanofibers, thereby generating heat sufficient for at least one of in-situ oxidation and in-situ exfoliation of a subsurface of each of the nanofibers. Excess oxidizing agent and acidic solvent are removed from the nanofibers, which are then dried. The dried nanofibers have reduced surface hydrophobicity. The surface modified nanofibers are substantially uniformly dispersed into the thermoset resin. The surface modified nanofibers are adapted to reduce cure shrinkage of the thermoset resin during subsequent curing processes.