Emission-line and continuum images show that the Halpha + [N II] filaments in M87 have a double stranded or ribbon-like morphology and that they are dusty. Spectroscopy of the filaments shows smoothly varying velocities within individual features. The innermost filaments are blueshifted with respect to systemic velocity. The presence of absorption associated with the emission filaments and alignment with the radio/optical jet suggests that this is foreground material, in which case it is flowing out from the nucleus rather than falling in. Conversely, line emitting gas associated with the more distant radio lobe, as deduced from Faraday rotation observations, appears to be background material, in which case it is infalling and not outflowing. By assuming pressure equilibrium between the filaments and coronal X-ray emitting gas, we estimate a high dust-to-ionized ps ratio, indicating that either the filaments are very dusty or there is a significant neutral fraction of gas. The amount of ionized gas in the filament system is estimated to be of order 10(5)-10(7) M.. If the filaments are overpressured with respect to the coronal ps, and fully ionized, e.g., if they are evaporating debris, or if there is a large neutral fraction then the dust-to-ps ratio is closer to the Galactic value. The apparent outflow near the nucleus may be a small-scale galactic wind within which the cooler 10(4) K material is entrained, or it may be due to the dynamical influence of the synchrotron jet. The capture of a small, dusty ps-rich dwarf may have occurred which has triggered the current activity, and whose gaseous remnant now forms the emission filament/dust system. If the filaments have condensed from the coronal phase in a cooling flow, then the cooling must have proceeded to a point where dust has been able to form.