Hi JamesonB1, The .hds file is the hard disk image that represents disk partitions in a virtual machine. It is typically located within a .hdd file, which itself is located inside a .pvm file. (Locate your .pvm file > right click and choose 'Show Package Contents' > choose .hdd file > right click and select 'Show Package Contents'.. this is the location of the .hds file that reflects the total size of the PVM).
Deleting the .hds file locate inside the pvm file will corrupt the virtual machine.