Garden Pests and Diseases: Diseased Elm Tree, 1 by Yellowbricks

Yellowbricks wrote:
In April of 2011, a tornado swept through our town and ripped a major section from our Elm tree. Most of it was still in tact and we had a nursery man/arborist come in to prune and aid it. This spring, however, the bark started falling revealing black diseased wood underneath. As it was overhanging our home, we decided to remove it.
Attached are pictures of what I'm assuming is an invasive fungus. The color was alarmingly red. The tree cutter had never seen anything like it. I am concerned for the health of the rest of our trees and shrubs. There are scattered wood chips looking like red and white confetti all over no matter how much cleaning up we do, and I'm sure spores are flying as I type. Can anyone advise me as to how dangerous this all is? Are we to invest in tanks of fungicide?