Abstract. We present a novel approach to investigate the properties of diffusion weighted magnetic resonance imaging (dMRI). The process of restricted diffusion of spin particles in the presence of a magnetic field is simulated by an iterated complex matrix multiplication approach. The approach is based on first principles and provides a flexible, transparent and fast simulation tool. The experiments carried out reveals fundamental features of the dMRI process. A particularly interesting observation is that the induced speed of the local spatial spin angle rate of change is highly shift variant. Hence, the encoding basis functions are not the complex exponentials associated with the Fourier transform as commonly assumed. Thus, reconstructing the signal using the inverse Fourier transform leads to large compartment estimation errors, which is demonstrated in a number of 1D and 2D examples. In accordance with previous investigations the compartment size is under-estimated. More interestingly, however, we show that the estimated shape is likely to be far from the true shape using state of the art clinical MRI scanners.