as far i as i can tell it grows from the fish poop.
Nitrogen Cycle Stages from http://www.fishlore.com/NitrogenCycle.htm
Stage 1
Ammonia is introduced into the aquarium via tropical fish waste and uneaten food. The tropical fish waste and excess food will break down into either ionized ammonium (NH4) or un-ionized ammonia (NH3). Ammonium is not harmful to tropical fish but ammonia is. Whether the material turns into ammonium or ammonia depends on the ph level of the water. If the ph is under 7, you will have ammonium. If the ph is 7 or higher you will have ammonia.
Stage 2
Soon, bacteria called
nitrosomonas will develop and they will oxidize the ammonia in the tank, essentially eliminating it. The byproduct of ammonia oxidation is Nitrites. So we no longer have ammonia in the tank, but we now have another toxin to deal with - Nitrites. Nitrites are just as toxic to tropical fish as ammonia. If you have a test kit, you should be able to see the nitrite levels rise around the end of the first or second week.
Stage 3
Bacteria called
nitrobacter will develop and they will convert the nitrites into nitrates. Nitrates are not as harmful to tropical fish as ammonia or nitrites, but nitrate is still harmful in large amounts. The quickest way to rid your aquarium of nitrates is to perform partial water changes. Once your tank is established you will need to monitor your tank water for high nitrate levels and perform partial water changes as necessary. There are other methods to control nitrates in aquariums besides water changes. For freshwater fish tanks, live aquarium plants will use up some of the nitrates. In saltwater fish tanks, live rock and deep sand beds can have anaerobic areas where denitrifying bacteria can breakdown nitrates into harmless nitrogen gas that escapes through the water surface of the aquarium.
http://www.fishlore.com/NitrogenCycle.htm