Material volume element ($D(\delta V)/Dt=(\nabla \cdot \mathbf{u})\delta V$)

A material volume element contains the same fluid particles as it moves and deforms. If its edges transform with the local velocity gradient, its volume changes at a rate equal to the trace of that gradient, giving $D(\delta V)/Dt=(\nabla \cdot \mathbf{u})\delta V$. Mass conservation states $D(\rho \delta V)/Dt=0$, not that its volume is always fixed. These two identities give the material form of the continuity equation, $D\rho /Dt=-\rho \nabla \cdot \mathbf{u}$.