Micro-channels are well-known for their excellent heat transfer properties and become more and more popular as compact cooling devices in semiconductor industry. When combined with flow boiling, micro-channels can exhibit heat transfer coefficients several orders of magnitude higher than those measured in conventional channels. However, the physics of the micro-channel boiling is not yet well understood and heat transfer characteristics and boiling regime transitions are usually predicted on semi-empirical correlations based on macro-channel observations. In this work we present a CFD model that combines free surface multiphase VOF technique with mass and heat transfer developed specifically for boiling phenomenon in micro-capillaries. The model allows accurate prediction of local heat transfer coefficient, pressure drop and shear stresses, as well as visualization of flow features in a micron range resolution. The inter-phase mass transfer is modeled locally by Hertz-Knudsen-Schrage equation with the nucleation onset temperature adjusted to specific micro-channel conditions. Full details of the CFD model with its validation will be provided during the presentation.