The objective of the proposed project is to significantly improve the effectiveness of the boundary integral method by "hybridizing" it with a finite-difference technique. The purpose is to be able to carry out numerical simulations with many particles suspended in a fluid with the objective to study flow characteristics of drops, capsules, and particles. The novel aspect of the approach is to project the point force distribution on the boundary on an underlying collocation points and solve for the flow field on this grid. The method will be applied to suspensions, emulsions with and without surfactants, capsules, and foams. The method is shown to be scalable on large parallel processors.