The non-equilibrium fluid mechanics and thermodynamics of two-phase vapour-droplet and gas-particle flow are considered. The formation of the droplets as well as their subsequent interaction with the vapour are discussed. Five topics have been given particular attention : (i) CFD application to unsteady condensation waves, (ii) CFD application to shock waves moving through a vapour-droplet mixture, (iii) a new theory of nucleation of water droplets in steam turbines based on Monte Carlo simulation (Steam turbines are responsible for 80% of global electricity production and the presence of moisture significantly reduces the turbine efficiency costing 50 million pounds per annum in UK alone.), (iv) a unified theory for the interpretation of total pressure and total temperature in two-phase flows, and, (v) a unified theory of particle transport in a turbulent flow field.