Hullin, Chapter Four, Mishnah One
Our mishnah deals with the status of the fetus within its mothers womb, when it may be eaten by virtue of its mother having been properly slaughtered and when it may not.
1) If an animal was having difficulty giving birth and the fetus put forth a limb and then put it back in, it may be eaten [when its mother is slaughtered].
a) If it put forth its head, even though it put it back in, it is considered as born.
2) Whatever is cut off from the fetus within the womb [and left inside] may be eaten, but whatever is cut off from the spleen or kidneys [of the animal and left inside] may not be eaten.
a) This is the rule: that which is from the body of the animal is forbidden, but that which is not from the body of the animal is permitted.
Section one: Generally, when a pregnant animal is slaughtered, the fetus may be eaten by virtue of its mother having been slaughtered. However, once the fetus has been born, it too needs to be slaughtered in order to be eaten. The mishnah determines that a fetus is considered to be offspring once its head has emerged, even if it puts its head back into the womb. If it puts forth a different limb, it is not considered as having been born.
We should note that the same criterion exists for human beings. A fetus is halakhically considered a life once its head has emerged. The main ramification is that up until this point, it is permitted to terminate (I would have used the word sacrifice, but that might have been confusing) the fetus in order to save the life of the mother. Beyond that point, and it is not.
Section two: If someone reaches into the mother and cuts off one of the fetuss limbs and leaves the limb in the womb, when the mother is slaughtered, that limb may be eaten. This is not considered to be eating a limb from a living animal, which is prohibited, because this is a limb of an animal that has not yet come to life. In contrast, if he reaches in and cuts off an organ from the animal itself and leaves it in inside the animal and then slaughters the animal, that limb is prohibited because it is a limb from a living animal. Without this mishnah one might have thought that as long as the limb is inside the animal when the animal is slaughtered, it is permitted.
The mishnah provides the general rule which explains this particular halakhah: if the limb is part of the animals body it is prohibited, but if it is not part of the animals body, because it is a fetus, it is permitted.