The development of ultra-precision processes which can achieve excellent surface finish and tolerance at the nanometre level is now a critical requirement for many industrial applications. At present, it is very difficult to observe the diverse microscopic physical phenomena occurring in nanometric machining through experiments. The use of molecular dynamics (MD) simulation has proved to be an effective tool for the prediction and the analysis of these processes at the nanometre scale. The crucial task in a MD simulation is the selection of the potential function. The lack of clear understanding about the scope and the limitations of a given potential function may lead to nonsensical results. This article presents the backgrounds of popular potentials used in the modelling of materials processes and the algorithms for the solution of the equations encountered in the simulation. Current applications of MD in abrasive machining are reviewed.