The Marker-Density-Function (MDF) method is developed for the direct numerical simulation of bubbly flows. The method is a front-capturing approach and then can capture three-dimensional complicated interfaces. The two phases of gas and liquid are separately solved and the dynamic boundary conditions at the interface are employed to connect the two phases. A new technique to avoid merging of bubbles is also developed to investigate the effects of a large number of bubbles in a periodical turbulent channel flow. Here the turbulent Couette flow containing 108 bubbles is simulated and the mechanism of drag reduction by microbubbles is explained by showing the 3 dimensional flow structures.