By combining methods of kinetic and density functional theory, we present a description of molecular fluids which accounts for their microscopic structure and thermodynamic properties as well as their hydrodynamic behavior. We focus on the evolution of the one-particle phase space distribution, rather than on the evolution of the average particle density which features in dynamic density functional theory. The resulting equation can be studied in two different physical limits: diffusive dynamics, typical of colloidal fluids without hydrodynamic interaction where particles are subject to overdamped motion resulting from coupling with a solvent at rest, and inertial dynamics, typical of molecular fluids. Finally, we propose an algorithm to solve numerically and efficiently the resulting kinetic equation by employing a discretization procedure analogous to the one used in the lattice Boltzmann method.