Menachos, chapter 12, mishnah 1. The question this mishnah comes to answer is: can a minchah be redeemed - can its sanctity be removed and transferred from a given wine, oil or fine flour to different wine, oil or fine flour?
To understand this we need some orderly background, and as we have already seen in this tractate, sanctity comes in two basic levels.
Two levels of sanctity:
Kedushas damim - only the monetary value is consecrated. This is an external sanctity, one that can be converted and transferred.
Kedushas haguf - intrinsic sanctity: the object itself is consecrated. As a rule, this sanctity can no longer be transferred, and there is no way to remove it from the object.
Two categories of recipients of consecration:
Kodshei bedek habayis - items consecrated for the upkeep of the Temple building itself.
Kodshei mizbeach - items consecrated to be offered on the altar.
The items fit to go up on the altar are: fine flour, oil, wine, wood, frankincense, cattle, goats, sheep, turtledoves and young pigeons. Anything not on this list cannot go up on the altar. Therefore, if a person consecrates a gold coin or a fountain pen to the Temple, it takes on the sanctity of bedek habayis: either the Temple will find a use for the object as it is and benefit from it, or it will be sold and the money used to pay the expenses of the Temple.
In all cases of kodshei bedek habayis, that is, in items that cannot go up on the altar, there is always only kedushas damim. They carry an external sanctity alone, and therefore it can always be transferred: if one wishes to convert the object into money, it is enough for the sanctity to move from the object to the money - the object is sold, the sanctity passes to the money, and with that money other items can be purchased for the needs of the Temple.
Here is the source of the confusion: since kodshei bedek habayis always carry only kedushas damim, the terms appear to overlap. The same is true of kodshei mizbeach: as a rule, if a person consecrates something fit to be burned on the altar - birds, frankincense or wood for the pyre - provided it is of a type fit to go up on the altar, it takes on the sanctity of the altar, which is kedushas haguf, an intrinsic sanctity, and there is no way to render it non-sacred. It cannot be redeemed at all.
The law of animals:
Animals - cattle, goats and sheep - are certainly kodshei mizbeach, since they are fit to be offered, and therefore they always take on kedushas haguf and never have kedushas damim at all. If a person says of his cow, "This cow is an olah," the cow is immediately sanctified with kedushas haguf, an intrinsic sanctity, and there is no way to redeem it. However, a separate verse teaches that an animal consecrated to the altar that is no longer fit to be offered, for example if it developed a blemish - at that point its sanctity can pass to another offering. This law is unique to animals alone, and does not apply to frankincense, to wood or to birds.
And how do these rules apply to the menachos?
As we saw earlier, dedicating a minchah happens in two stages. The first is the verbal designation: a person declares of this fine flour, of this log of olive oil, or of this wine, that it is designated to serve as a minchah. This verbal dedication invests them with kedushas damim alone, an external sanctity, and therefore they can still be redeemed.
However, for a separate and unrelated reason there is a rule: anything fit to go up on the Altar must remain on the Altar, and may not be transferred elsewhere. Therefore, unlike a gold coin or a pen dedicated to the upkeep of the Temple, which carry kedushas damim and can be redeemed for any reason or for no reason at all, menachos that were dedicated verbally - even though they carry only kedushas damim - are not redeemed for any reason or for no reason. But if there is a legitimate reason, such as the oil having become tamei, it certainly may be redeemed and new oil purchased. All of this applies when there is nothing more than a verbal dedication.
But from the moment the minchah is placed into a k'li shareis - that same flour, oil or wine placed into a sanctified vessel of the Beis HaMikdash - this invests the minchah with kedushas haguf. From this point its law is like that of a bird, like the wood of the Altar arrangement and like the levonah: it has kedushas haguf, and there is no way whatsoever to render it chullin, to redeem it, or to transfer its sanctity elsewhere. This law is even stricter than the law of animals, for with an animal - a cow, a goat or a sheep - there is at least a verse teaching that if it became disqualified through a blemish it can be redeemed, and that verse is unique to an animal and does not apply to menachos. Therefore, one who places the flour, wine or oil of a minchah into a k'li shareis causes kedushas haguf to take effect upon them; and if they later become disqualified, such as by becoming tamei, there is no remedy: they must be burned in the Beis HaMikdash as a disqualified minchah, and the person must bring new flour, oil or wine from the beginning.
That is the content of the mishnah as a whole. The wording of the mishnah itself is far more terse and cryptic, and this is what it means:
"HaMenachos v'haNesachim" - the components used for a minchah: the soles, the fine flour (usually wheat flour), the oil that accompanies it, olive oil, and the nesachim, kosher wine. "ShaNitm'u" - they became tamei, and now there is a good reason to seek to redeem them and transfer their sanctity elsewhere.
"Ad shelo kadshu bakli" - as long as they have not been placed into a k'li shareis, a sanctified vessel of the Mikdash, they carry only kedushas damim, and therefore "yeish lahen pidyon" - the sanctity can be redeemed off that flour, wine or oil, and new ones brought in their place.
"Mishekidshu bakli" - but from the moment they have been sanctified, once the soles, oil or wine has been placed into a sanctified k'li shareis of the Beis HaMikdash, kedushas haguf takes effect upon them, an intrinsic sanctity, and therefore "ein lahen pidyon" - if they became tamei there is no possibility of redeeming them; rather they must be disposed of in the proper manner in the Beis HaMikdash and one must start over.
"Ha'ofos v'ha'eitzim v'halevonah u'chlei shareis" - kosher birds, turtledoves and young pigeons; wood fit for the Altar arrangement; levonah fit for a minchah; and the sanctified service vessels - "ein lahen pidyon". All of these carry kedushas haguf, and therefore there is never any way to redeem them.
And although such redemption does exist for an animal that became disqualified, that is only by force of the verse: "shelo ne'emar ela beheimah". The derashah from which this is learned is complex, and we will not enter into its technical details; its source is in Vayikra chapter 11, where the word "beheimah" appears. The essential point is that the verse comes to teach that redemption exists for a disqualified animal, but this law does not apply to anything else: not to menachos that were placed in a k'li shareis and acquired kedushas haguf, and not to sanctified wood, levonah and birds.
In summary: the law of redemption for menachos and nesachim depends on the stage of dedication - a verbal dedication invests them with kedushas damim alone, and therefore they can be redeemed when the need arises; whereas placing them in a k'li shareis invests them with kedushas haguf, after which there is no redemption at all. The same is true of birds, wood, levonah and the service vessels, whose sanctity is kedushas haguf. Only for a disqualified animal is a special law of redemption stated, by force of the verse that applies to an animal alone.