The cellular character of blood leads to complex flow phenomenology in vessels that are of comparable size to that of blood cells. We have designed and implemented an advanced algorithm that simultaneously solves for the dynamics of the highly deformable blood cells and their flow in such confined geometries. It is a boundary integral solver, with fast methods for evaluating the hydrodynamic interactions and spherical harmonics for representing cell shapes. The merits of this approach will be discussed from the perspective of the resolution of the discretization. The talk will include studies of three model configurations. (1) The transport of magnetic nanometer-scale particles in small vessels, which can be used for target drug or hyperthermia treatment. Stirring through interaction with the red blood cells lead these to marginate to vessel walls, but this is non- trivially coupled with applied magnetic forces. (2) A study of the flow of red-blood cell through a model spleenic slit, which seems to represent the smallest blood passages in the body. An instability-like bifurcation is identified that is potentially important physiologically and for engineered microdevices that process blood. Finally, (3) the transient and asymptotic stability of a single-file train of elastic capsules.