Abstract This paper presents a new hybrid two-phase flow numerical model. It uses the Discrete Phase Model (DPM) and the Volume of Fluid model (VoF) to study the interaction between air, oil droplets and films in a bearing compartment. It allows transition from a trackable Lagrangian particle, such as a droplet, into a continuous liquid structure in a Eulerian frame of reference. The transition can also be performed in the opposite direction, where a continuous liquid structure can be converted back into a trackable particle if specific requirements are met. The method is designated as DPM-VoF-DPM throughout this paper. Test cases capturing the impingement of a droplet in a liquid film are performed to assess its effectiveness. The simulation of a simplified bearing compartment is compared with measurements and results obtained using a standard VoF modeling approach. Mechanisms which are usually modeled such as droplet splashing, film separation, and droplet stripping, can now be physically captured with reduced computing resources by allowing transition from continuous liquid structures to discrete parcels. The employed modeling strategy allows for high resolution of the oil film at the walls and tracking of the droplets while minimizing mesh size and computing needs. Current results suggest that the proposed DPM-VoF-DPM method can be an efficient and accurate tool for locating air and oil in aero-engine transmission systems.