Introduction to particle systems
All graphics and effects we have created so far use static meshes, 3D models that can't be skewed, bent, or deformed in any way. Fluids such as fire and smoke clearly can't be represented using this kind of mesh, but actually, we can simulate these effects with a combination of static meshes, and this is where particle systems are useful.
Particle systems are objects that emit and animates lots of particles or billboards, which are simple quad meshes that face the camera. Each particle is a static mesh, but rendering, animating, and combining lots of them can generate the illusion of a fluid. In the next image you can see on the left a smoke effect using particle systems, and on the right, the Wireframe view of the same particles. There you can see the quads that create the illusion of smoke, which is done by applying a smoke texture to each of the particles and animating them so they spawn at the bottom and move up in random directions...