diff --git a/lib/Stow.pm.in b/lib/Stow.pm.in
index 77f67b3..7a78a1b 100755
--- a/lib/Stow.pm.in
+++ b/lib/Stow.pm.in
@@ -367,9 +367,16 @@ sub within_target_do {
 #============================================================================
 sub stow_contents {
     my $self = shift;
-    my ($stow_path, $package, $target, $source) = @_;
+    my ($stow_path, $package, $package_target, $source) = @_;
 
-    my $path = join_paths($stow_path, $package, $target);
+    my $target = $package_target;
+
+    if ($self->{dotfiles}) {
+        debug(4, "  Adjusting: $package_target => $target");
+        $target = adjust_dotfile($package_target);
+    }
+
+    my $path = join_paths($stow_path, $package, $package_target);
 
     return if $self->should_skip_target_which_is_stow_dir($target);
 
@@ -393,15 +400,9 @@ sub stow_contents {
     for my $node (@listing) {
         next NODE if $node eq '.';
         next NODE if $node eq '..';
-        my $node_target = join_paths($target, $node);
+        my $node_target = join_paths($package_target, $node);
         next NODE if $self->ignore($stow_path, $package, $node_target);
 
-        if ($self->{dotfiles}) {
-            my $adj_node_target = adjust_dotfile($node_target);
-            debug(4, "  Adjusting: $node_target => $adj_node_target");
-            $node_target = $adj_node_target;
-        }
-
         $self->stow_node(
             $stow_path,
             $package,
@@ -429,11 +430,18 @@ sub stow_contents {
 #============================================================================
 sub stow_node {
     my $self = shift;
-    my ($stow_path, $package, $target, $source) = @_;
+    my ($stow_path, $package, $package_target, $source) = @_;
 
-    my $path = join_paths($stow_path, $package, $target);
+    my $target = $package_target;
+
+    if ($self->{dotfiles}) {
+        debug(4, "  Adjusting: $package_target => $target");
+        $target = adjust_dotfile($package_target);
+    }
 
-    debug(3, "Stowing $stow_path / $package / $target");
+    my $path = join_paths($stow_path, $package, $package_target);
+
+    debug(3, "Stowing $stow_path / $package / $package_target");
     debug(4, "  => $source");
 
     # Don't try to stow absolute symlinks (they can't be unstowed)
@@ -497,13 +505,13 @@ sub stow_node {
                 $self->stow_contents(
                     $existing_stow_path,
                     $existing_package,
-                    $target,
+                    $package_target,
                     join_paths('..', $existing_source),
                 );
                 $self->stow_contents(
                     $self->{stow_path},
                     $package,
-                    $target,
+                    $package_target,
                     join_paths('..', $source),
                 );
             }
@@ -529,7 +537,7 @@ sub stow_node {
             $self->stow_contents(
                 $self->{stow_path},
                 $package,
-                $target,
+                $package_target,
                 join_paths('..', $source),
             );
         }
@@ -552,7 +560,7 @@ sub stow_node {
         $self->stow_contents(
             $self->{stow_path},
             $package,
-            $target,
+            $package_target,
             join_paths('..', $source),
         );
     }
@@ -740,9 +748,15 @@ sub unstow_node_orig {
 #============================================================================
 sub unstow_contents {
     my $self = shift;
-    my ($stow_path, $package, $target) = @_;
+    my ($stow_path, $package, $package_target) = @_;
 
-    my $path = join_paths($stow_path, $package, $target);
+    my $target = $package_target;
+
+    if ($self->{dotfiles}) {
+        $target = adjust_dotfile($package_target);
+    }
+
+    my $path = join_paths($stow_path, $package, $package_target);
 
     return if $self->should_skip_target_which_is_stow_dir($target);
 
@@ -769,15 +783,9 @@ sub unstow_contents {
     for my $node (@listing) {
         next NODE if $node eq '.';
         next NODE if $node eq '..';
-        my $node_target = join_paths($target, $node);
+        my $node_target = join_paths($package_target, $node);
         next NODE if $self->ignore($stow_path, $package, $node_target);
 
-        if ($self->{dotfiles}) {
-            my $adj_node_target = adjust_dotfile($node_target);
-            debug(4, "  Adjusting: $node_target => $adj_node_target");
-            $node_target = $adj_node_target;
-        }
-
         $self->unstow_node($stow_path, $package, $node_target);
     }
     if (-d $target) {
@@ -798,9 +806,15 @@ sub unstow_contents {
 #============================================================================
 sub unstow_node {
     my $self = shift;
-    my ($stow_path, $package, $target) = @_;
+    my ($stow_path, $package, $package_target) = @_;
 
-    my $path = join_paths($stow_path, $package, $target);
+    my $target = $package_target;
+
+    if ($self->{dotfiles}) {
+        $target = adjust_dotfile($package_target);
+    }
+
+    my $path = join_paths($stow_path, $package, $package_target);
 
     debug(3, "Unstowing $path");
     debug(4, "  target is $target");
@@ -836,11 +850,6 @@ sub unstow_node {
         if (-e $existing_path) {
             # Does link points to the right place?
 
-            # Adjust for dotfile if necessary.
-            if ($self->{dotfiles}) {
-                $existing_path = adjust_dotfile($existing_path);
-            }
-
             if ($existing_path eq $path) {
                 $self->do_unlink($target);
             }
@@ -872,11 +881,11 @@ sub unstow_node {
     elsif (-e $target) {
         debug(4, "  Evaluate existing node: $target");
         if (-d $target) {
-            $self->unstow_contents($stow_path, $package, $target);
+            $self->unstow_contents($stow_path, $package, $package_target);
 
             # This action may have made the parent directory foldable
             if (my $parent = $self->foldable($target)) {
-                $self->fold_tree($target, $parent);
+                $self->fold_tree($package_target, $parent);
             }
         }
         else {
diff --git a/t/dotfiles.t b/t/dotfiles.t
index a4a45c8..5699a75 100755
--- a/t/dotfiles.t
+++ b/t/dotfiles.t
@@ -24,7 +24,7 @@ use warnings;
 
 use testutil;
 
-use Test::More tests => 6;
+use Test::More tests => 9;
 use English qw(-no_match_vars);
 
 use testutil;
@@ -129,3 +129,53 @@ ok(
     -f '../stow/dotfiles/dot-bar' && ! -e '.bar'
     => 'unstow a simple dotfile'
 );
+
+#
+# stow into existing directory
+#
+
+$stow = new_Stow(dir => '../stow', dotfiles => 1);
+
+make_path('.config');
+make_path('../stow/emacs/dot-config/emacs');
+make_file('../stow/emacs/dot-config/emacs/init.el');
+
+$stow->plan_stow('emacs');
+$stow->process_tasks();
+is(
+    readlink('.config/emacs'),
+    '../../stow/emacs/dot-config/emacs',
+    => 'processed dotfile folder into existing folder'
+);
+
+#
+# unstow from existing directory
+#
+
+$stow = new_Stow(dir => '../stow', dotfiles => 1);
+
+$stow->plan_unstow('emacs');
+$stow->process_tasks();
+ok(
+    $stow->get_conflict_count == 0 &&
+    -d '.config' && ! -e '.config/stow' &&
+    -f '../stow/emacs/dot-config/emacs/init.el'
+    => 'unstow from a directory'
+);
+
+#
+# package containing a dot dir, no folding
+#
+
+$stow = new_Stow(dir => '../stow', dotfiles => 1, 'no-folding' => 1);
+
+make_path('../stow/emacs/dot-config/emacs');
+make_file('../stow/emacs/dot-config/emacs/init.el');
+
+$stow->plan_stow('emacs');
+$stow->process_tasks();
+is(
+    readlink('.config/emacs/init.el'),
+    '../../../stow/emacs/dot-config/emacs/init.el',
+    => 'processed dotfile folder without folding'
+);