Does anyone know how this was done

http://media.putfile.com/MetaObject1

I think this was done with animated metaball. You can find them in the Add menu , meta object …

My guess is metaballs were dupliverts of a particle emitter inside a larger metaball. Some of the metas are set to negative as well.

that worked CD38

that file was the subject of a post not to long ago answering a question I had. try

https://blenderartists.org/forum/viewtopic.php?t=59118&highlight=meta