VHD file smaller than used disk space on guest operating system.

Hello,

While trying to make space on my Virtual Machine I noticed that the virtual hard disk file is actually smaller than what the guest operating system reports as being in use. The VHD file is 35GB whereas when I connect to the virtual machine the guest reports that 39GB is in use. How can this be? Also, the VHD is dynamically expanding if that makes any difference.