A system comprises an encoder configured to compress and encode data for a three-dimensional dynamic mesh. The three-dimensional dynamic mesh is compressed and signaled using a base-mesh sub-bitstream and a displacement sub-bitstream. The displacement sub-bitstream comprises displacement information to be applied at sub-division points of the base mesh to recreate the three-dimensional dynamic mesh at a given moment in time. A separate data unit type is used to signal the displacement sub-bitstream that allows for efficient signaling of sub-blocks that are only partially occupied or empty. Also, a separate patch type may be used in an atlas bitstream to signal the displacement data units. A complimentary decoder decodes a compressed bitstream for the three-dimensional dynamic mesh, encoded such as by the encoder.