diff --git a/server/camlistored/ui/blob_item.css b/server/camlistored/ui/blob_item.css
index d1243b4a4..2d4a809ba 100644
--- a/server/camlistored/ui/blob_item.css
+++ b/server/camlistored/ui/blob_item.css
@@ -84,3 +84,12 @@
   text-decoration: underline;
   background: #999;
 }
+
+.cam-blobitem-dropactive {
+  outline: 0;  /* Do not show an outline when container has focus. */
+  border-width: 5px;
+  border-color: #acf;
+  border-style: dashed;
+  position: relative;
+  border-radius: 5px;
+}
diff --git a/server/camlistored/ui/blob_item.js b/server/camlistored/ui/blob_item.js
index a27de2e32..6d3b1e635 100644
--- a/server/camlistored/ui/blob_item.js
+++ b/server/camlistored/ui/blob_item.js
@@ -133,6 +133,7 @@ camlistore.BlobItem.prototype.isCollection = function() {
 	return true;
 };
 
+
 /**
  * @return {string}
  */
@@ -282,8 +283,48 @@ camlistore.BlobItem.prototype.disposeInternal = function() {
  * Called when component's element is known to be in the document.
  */
 camlistore.BlobItem.prototype.enterDocument = function() {
-  camlistore.BlobItem.superClass_.enterDocument.call(this);
-  // Add event handlers here
+	camlistore.BlobItem.superClass_.enterDocument.call(this);
+
+	var thumbLink = goog.dom.getFirstElementChild(this.getElement());
+	this.eh_.listen(
+		thumbLink,
+		goog.events.EventType.DRAGENTER,
+		this.handleFileDragEnter_);
+	this.eh_.listen(
+		thumbLink,
+		goog.events.EventType.DRAGLEAVE,
+		this.handleFileDragLeave_);
+};
+
+
+/**
+ * @param {goog.events.Event} e The drag drop event.
+ * @private
+ */
+camlistore.BlobItem.prototype.handleFileDragEnter_ = function(e) {
+	e.preventDefault();
+	e.stopPropagation();
+	if (this.isCollection()) {
+		goog.dom.classes.add(this.getElement(), 'cam-blobitem-dropactive');
+		// we could dispatch another custom event to the container, but why bother
+		// since we can directly access it?
+		var container = this.getParent();
+		container.notifyDragEnter_(this);
+	}
+};
+
+/**
+ * @param {goog.events.Event} e The drag drop event.
+ * @private
+ */
+camlistore.BlobItem.prototype.handleFileDragLeave_ = function(e) {
+	e.preventDefault();
+	e.stopPropagation();
+	if (this.isCollection()) {
+		goog.dom.classes.remove(this.getElement(), 'cam-blobitem-dropactive');
+		var container = this.getParent();
+		container.notifyDragLeave_(this);
+	}
 };
 
 
@@ -293,5 +334,5 @@ camlistore.BlobItem.prototype.enterDocument = function() {
  */
 camlistore.BlobItem.prototype.exitDocument = function() {
   camlistore.BlobItem.superClass_.exitDocument.call(this);
-  // Clear event handlers here
+  this.eh_.removeAll();
 };
diff --git a/server/camlistored/ui/blob_item_container.js b/server/camlistored/ui/blob_item_container.js
index 69e04be02..956fabc95 100644
--- a/server/camlistored/ui/blob_item_container.js
+++ b/server/camlistored/ui/blob_item_container.js
@@ -203,14 +203,6 @@ camlistore.BlobItemContainer.prototype.enterDocument = function() {
       this.fileDropHandler_,
       goog.events.FileDropHandler.EventType.DROP,
       this.handleFileDrop_);
-  this.eh_.listen(
-      this.getElement(),
-      goog.events.EventType.DRAGENTER,
-      this.handleFileDragEnter_);
-  this.eh_.listen(
-      this.getElement(),
-      goog.events.EventType.DRAGLEAVE,
-      this.handleFileDragLeave_);
 };
 
 
@@ -531,16 +523,25 @@ camlistore.BlobItemContainer.prototype.resetChildren_ = function() {
  * @private
  */
 camlistore.BlobItemContainer.prototype.handleFileDrop_ = function(e) {
-  this.resetDragState_();
-
-  var files = e.getBrowserEvent().dataTransfer.files;
-  for (var i = 0, n = files.length; i < n; i++) {
-    var file = files[i];
-    // TODO(bslatkin): Add an uploading item placeholder while the upload
-    // is in progress. Somehow pipe through the POST progress.
-    this.connection_.uploadFile(
-        file, goog.bind(this.handleUploadSuccess_, this, file));
-  }
+	var recipient = this.dragActiveElement_;
+	// TODO(mpl): I should adapt resetDragState_, but maybe Brett wanted
+	// to do something different with the whole d&d story, so leaving it
+	// as it is for now, and not using it.
+	this.dragActiveElement_ = null;
+	if (!recipient) {
+		console.log("No valid target to drag and drop on.");
+		return;
+	}
+	goog.dom.classes.remove(recipient.getElement(), 'cam-blobitem-dropactive');
+	
+	var files = e.getBrowserEvent().dataTransfer.files;
+	for (var i = 0, n = files.length; i < n; i++) {
+	var file = files[i];
+	// TODO(bslatkin): Add an uploading item placeholder while the upload
+	// is in progress. Somehow pipe through the POST progress.
+	this.connection_.uploadFile(
+		file, goog.bind(this.handleUploadSuccess_, this, file, recipient.blobRef_));
+	}
 };
 
 
@@ -550,9 +551,9 @@ camlistore.BlobItemContainer.prototype.handleFileDrop_ = function(e) {
  * @private
  */
 camlistore.BlobItemContainer.prototype.handleUploadSuccess_ =
-    function(file, blobRef) {
+    function(file, recipient, blobRef) {
   this.connection_.createPermanode(
-      goog.bind(this.handleCreatePermanodeSuccess_, this, file, blobRef));
+      goog.bind(this.handleCreatePermanodeSuccess_, this, file, recipient, blobRef));
 };
 
 
@@ -563,11 +564,11 @@ camlistore.BlobItemContainer.prototype.handleUploadSuccess_ =
  * @private
  */
 camlistore.BlobItemContainer.prototype.handleCreatePermanodeSuccess_ =
-    function(file, blobRef, permanode) {
+    function(file, recipient, blobRef, permanode) {
   this.connection_.newSetAttributeClaim(
       permanode, 'camliContent', blobRef,
       goog.bind(this.handleSetAttributeSuccess_, this,
-                file, blobRef, permanode));
+                file, recipient, blobRef, permanode));
 };
 
 
@@ -578,11 +579,11 @@ camlistore.BlobItemContainer.prototype.handleCreatePermanodeSuccess_ =
  * @private
  */
 camlistore.BlobItemContainer.prototype.handleSetAttributeSuccess_ =
-    function(file, blobRef, permanode) {
-  this.connection_.describeWithThumbnails(
-      permanode,
-      this.thumbnailSize_,
-      goog.bind(this.handleDescribeSuccess_, this, permanode));
+function(file, recipient, blobRef, permanode) {
+	this.connection_.describeWithThumbnails(
+		permanode,
+		this.thumbnailSize_,
+		goog.bind(this.handleDescribeSuccess_, this, recipient, permanode));
 };
 
 
@@ -592,9 +593,20 @@ camlistore.BlobItemContainer.prototype.handleSetAttributeSuccess_ =
  * @private
  */
 camlistore.BlobItemContainer.prototype.handleDescribeSuccess_ =
-  function(permanode, describeResult) {
-  var item = new camlistore.BlobItem(permanode, describeResult.meta);
-  this.addChildAt(item, this.hasCreateItem_ ? 1 : 0, true);
+  function(recipient, permanode, describeResult) {
+	var item = new camlistore.BlobItem(permanode, describeResult.meta);
+	this.addChildAt(item, this.hasCreateItem_ ? 1 : 0, true);
+	if (!recipient) {
+		return;
+	}
+	if (this.hasCreateItem_) {
+		var createItem = this.getChildAt(0);
+		if (!createItem || recipient == createItem) {
+			return;
+		}
+	}
+	this.connection_.newAddAttributeClaim(
+		recipient, 'camliMember', permanode);
 };
 
 
@@ -608,7 +620,30 @@ camlistore.BlobItemContainer.prototype.resetDragState_ = function() {
   this.dragDepth_ = 0;
 };
 
+/**
+ * @param {camlistore.BlobItem} blobitem the target collection where we want to drop
+ * @private
+ */
+camlistore.BlobItemContainer.prototype.notifyDragEnter_ =
+function(blobitem) {
+		if (this.dragActiveElement_ == null) {
+			// TODO(mpl): show the drag-message; need to figure out the flickering issue
+			this.dragActiveElement_ = blobitem;
+		}
+};
 
+/**
+ * @param {camlistore.BlobItem} blobitem the target collection where we want to drop
+ * @private
+ */
+camlistore.BlobItemContainer.prototype.notifyDragLeave_ =
+function(blobitem) {
+		if (this.dragActiveElement_ === blobitem) {
+  			this.dragActiveElement_ = null;
+		}
+};
+
+// TODO(mpl): not using it anymore. remove if Brett is ok with it.
 /**
  * @param {goog.events.Event} e The drag enter event.
  * @private
@@ -622,6 +657,7 @@ camlistore.BlobItemContainer.prototype.handleFileDragEnter_ = function(e) {
 };
 
 
+// TODO(mpl): not using it anymore. remove if Brett is ok with it.
 /**
  * @param {goog.events.Event} e The drag leave event.
  * @private
diff --git a/server/camlistored/ui/create_item.js b/server/camlistored/ui/create_item.js
index 9823c5b6f..030678fd5 100644
--- a/server/camlistored/ui/create_item.js
+++ b/server/camlistored/ui/create_item.js
@@ -71,8 +71,40 @@ camlistore.CreateItem.prototype.disposeInternal = function() {
  */
 camlistore.CreateItem.prototype.enterDocument = function() {
   camlistore.CreateItem.superClass_.enterDocument.call(this);
+	var plusEl = goog.dom.getFirstElementChild(this.getElement());
+	this.eh_.listen(
+		plusEl,
+		goog.events.EventType.DRAGENTER,
+		this.handleFileDragEnter_);
+	this.eh_.listen(
+		plusEl,
+		goog.events.EventType.DRAGLEAVE,
+		this.handleFileDragLeave_);
 };
 
+/**
+ * @param {goog.events.Event} e The drag drop event.
+ * @private
+ */
+camlistore.CreateItem.prototype.handleFileDragEnter_ = function(e) {
+	e.preventDefault();
+	e.stopPropagation();
+	goog.dom.classes.add(this.getElement(), 'cam-blobitem-dropactive');
+	var container = this.getParent();
+	container.notifyDragEnter_(this);
+};
+
+/**
+ * @param {goog.events.Event} e The drag drop event.
+ * @private
+ */
+camlistore.CreateItem.prototype.handleFileDragLeave_ = function(e) {
+	e.preventDefault();
+	e.stopPropagation();
+	goog.dom.classes.remove(this.getElement(), 'cam-blobitem-dropactive');
+	var container = this.getParent();
+	container.notifyDragLeave_(this);
+};
 
 /**
  * Called when component's element is known to have been removed from the
diff --git a/server/camlistored/ui/server_connection.js b/server/camlistored/ui/server_connection.js
index 8f129eaaa..f1428dff4 100644
--- a/server/camlistored/ui/server_connection.js
+++ b/server/camlistored/ui/server_connection.js
@@ -447,7 +447,9 @@ function(blobref, success, opt_fail, e) {
 				alert("upload permanode fail, expected blobRef not in response");
 				return;
 			}
-			success(blobref);
+			if (success) {
+				success(blobref);
+			}
 		},
 		this.safeFail_(opt_fail),
 		e