What is it?
The Navier–Stokes equations for a velocity field and pressure . Engineering CFD solves them on meshes with finite volumes; film and games use "stable fluids" (Stam, 1999): advect, add forces, and project to zero divergence by solving a Poisson equation.
Formulas
The mathematics behind it
The state of a fluid simulation is a velocity field .
Incompressibility is enforced each step by a pressure projection.
Vorticity describes eddies; "vorticity confinement" adds back swirls lost to numerical damping in film VFX.
Finite-volume CFD is the divergence theorem applied cell by cell — the proof idea above, as an algorithm.
The Navier–Stokes equations are a nonlinear system of PDEs.
Grid-based fluid solvers discretize derivatives with finite differences on staggered grids.
The pressure projection solves a Poisson equation every time step.
Finite-volume solvers update each cell by the fluxes across its faces.
Where is it used?
Computing topics reachable from here, through the chain of ideas that leads to them:
What depends on it
This page has the essentials. A fuller treatment (intuition, formal definition, worked example) is on the way.