Virtual server disk space

hi,

we are using a server 2012 running hyperV  . hyper V houses a virtual file server( FS1 ), and a virtual terminal server ( TS1 ).

We noticed that the disk space on my hyper V server had been used and there was very little left.  my tech, and I am no tech, said that for a temporary time,  I had copied a large file on to my FS1 , which allocated space from my HyperV.    and that although I deleted the file from FS1,  the hyper V server does not contract, even after the FS1 server deleted the large file

he explained it this way... it was like putting a big box on my hyper V  with data in it.  then subsequently removing the contents of the box, did not affect the fact that hyper v was still accommodating the size of that box.

sounds all good, but my hyper V C drive is a color of bright red in my file explorer and it concerns me with a relatively small amount of disk space free , at least seemingly so.

Can anyone confirm this is how it functions, and is there a type of a Defrag program which reclaims this unused space for my hyper V server ?