This is Phun
Phun (and Algodoo) are based on highly competitive technologies for interactive multiphysics simulation, ranging from novel physical models and variational integrators to high performance numerical methods.
Phun is off-spring from research at Umeå university, and a MSc project of Emil Ernerfeldt, now further developed at Algoryx Simulation. Algoryx also develops a professional 3D multiphysics engine called AgX.
Check it out: