  A density functional theory for colloidal dynamics is presented which
includes hydrodynamic interactions between the colloidal particles. The theory
is applied to the dynamics of colloidal particles in an optical trap which
switches periodically in time from a stable to unstable confining potential. In
the absence of hydrodynamic interactions, the resulting density breathing mode,
exhibits huge oscillations in the trap center which are almost completely
damped by hydrodynamic interactions. The predicted dynamical density fields are
in good agreement with Brownian dynamics computer simulations.
