diff --git a/README.md b/README.md
index b9fb20a..1a6c08d 100644
--- a/README.md
+++ b/README.md
@@ -48,7 +48,7 @@ localStorage. It is the acceptance surface for the spec's UI rows, not the produ
 surface (that is Covenstead inside Coven Cave).
 
 ```sh
-npm run dev       # http://127.0.0.1:5178 (live: https://cauldron-shell.vercel.app)
+npm run dev       # http://127.0.0.1:5188 (live: https://cauldron-shell.vercel.app)
 npm run test:e2e  # Playwright, Chromium; tests are named by spec row
 ```
 
diff --git a/apps/shell/e2e/rows2.spec.ts b/apps/shell/e2e/rows2.spec.ts
new file mode 100644
index 0000000..bc2a2ef
--- /dev/null
+++ b/apps/shell/e2e/rows2.spec.ts
@@ -0,0 +1,185 @@
+import { expect, test, type Page } from "@playwright/test";
+
+const win = (page: Page, app: string) => page.locator(`section.win[data-app="${app}"]`);
+const menu = async (page: Page, title: string, item: string | RegExp) => {
+  await page.locator(".menu > .menu-title", { hasText: title }).first().dispatchEvent("pointerdown");
+  await page.locator(".menu.open .menu-items button", { hasText: item }).first().click();
+};
+const U = { actor: { kind: "user", id: "user" } } as const;
+const exists = (page: Page, path: string) =>
+  page.evaluate(([p]) => window.cauldron.shell.kernel.vfs.exists({ actor: { kind: "user", id: "user" } }, p!), [path]);
+const read = (page: Page, path: string) =>
+  page.evaluate(([p]) => window.cauldron.shell.kernel.vfs.read({ actor: { kind: "user", id: "user" } }, p!).content, [path]);
+void U;
+
+test.beforeEach(async ({ page }) => {
+  await page.goto("/");
+  await expect(win(page, "finder").first()).toBeVisible();
+});
+
+/** Two Finder windows side by side: A on /Documents (left), B on /Shared (right). */
+async function twoFinders(page: Page) {
+  await menu(page, "✦", "New Finder Window");
+  await menu(page, "Go", "Shared");
+  await page.evaluate(() => {
+    const { wm } = window.cauldron.shell.kernel;
+    const [a, b] = wm.list().filter((w) => w.appId === "finder");
+    const u = { actor: { kind: "user" as const, id: "user" } };
+    wm.move(u, a!.id, 20, 60);
+    wm.move(u, b!.id, 660, 60);
+  });
+  return [win(page, "finder").nth(0), win(page, "finder").nth(1)] as const;
+}
+
+test("FND-04 drag a file to another Finder window moves it; Option/Alt-drag copies", async ({ page }) => {
+  const [a, b] = await twoFinders(page);
+  await expect(a.locator(".path")).toHaveText("/Documents");
+  await expect(b.locator(".path")).toHaveText("/Shared");
+
+  await a.locator('tr[data-name="Welcome.txt"]').dragTo(b.locator(".scroll"));
+  await expect(b.locator('tr[data-name="Welcome.txt"]')).toBeVisible();
+  await expect(a.locator('tr[data-name="Welcome.txt"]')).toHaveCount(0);
+
+  await page.evaluate(() => window.cauldron.shell.kernel.vfs.create({ actor: { kind: "user", id: "user" } }, "/Documents/keep.txt", "file", { content: "k" }));
+  await page.keyboard.down("Alt");
+  await a.locator('tr[data-name="keep.txt"]').dragTo(b.locator(".scroll"));
+  await page.keyboard.up("Alt");
+  await expect(b.locator('tr[data-name="keep.txt"]')).toBeVisible();
+  await expect(a.locator('tr[data-name="keep.txt"]')).toBeVisible();
+  expect(await read(page, "/Shared/keep.txt")).toBe("k");
+});
+
+test("FND-04b dropping onto a folder row moves the file into that folder", async ({ page }) => {
+  const f = win(page, "finder").first();
+  await page.evaluate(() => window.cauldron.shell.kernel.vfs.create({ actor: { kind: "user", id: "user" } }, "/Documents/Plans", "folder"));
+  await f.locator('tr[data-name="Welcome.txt"]').dragTo(f.locator('tr[data-name="Plans"]'));
+  expect(await exists(page, "/Documents/Plans/Welcome.txt")).toBe(true);
+});
+
+test("FND-07 desktop shows /Desktop as icons; dropping an icon on Trash trashes it and fills the Trash", async ({ page }) => {
+  const trash = page.locator('.desk-icon.trash');
+  await expect(trash).toHaveAttribute("data-full", "false");
+  await page.evaluate(() => window.cauldron.shell.kernel.vfs.create({ actor: { kind: "user", id: "user" } }, "/Desktop/notes.txt", "file", { content: "n" }));
+  const icon = page.locator('.desk-icon[data-name="notes.txt"]');
+  await expect(icon).toBeVisible();
+  await icon.dragTo(trash);
+  await expect(icon).toHaveCount(0);
+  await expect(trash).toHaveAttribute("data-full", "true");
+  expect(await exists(page, "/Trash/notes.txt")).toBe(true);
+});
+
+test("FND-07b dragging a Finder row onto the desktop moves it to /Desktop; double-click opens it", async ({ page }) => {
+  const f = win(page, "finder").first();
+  await f.locator('tr[data-name="Welcome.txt"]').dragTo(page.locator("#desktop-icons"), { targetPosition: { x: 60, y: 600 } });
+  const icon = page.locator('.desk-icon[data-name="Welcome.txt"]');
+  await expect(icon).toBeVisible();
+  expect(await exists(page, "/Desktop/Welcome.txt")).toBe(true);
+  await icon.dblclick();
+  await expect(win(page, "textedit").first().locator("textarea")).toHaveValue(/^Welcome\./);
+});
+
+test("TXT-03 three edits, Undo ×3, Redo ×3 — content matches at each step", async ({ page }) => {
+  await menu(page, "✦", "New TextEdit Document");
+  const t = win(page, "textedit").first().locator("textarea");
+  await t.fill("a");
+  await t.fill("ab");
+  await t.fill("abc");
+  for (const want of ["ab", "a", ""]) {
+    await page.keyboard.press("ControlOrMeta+z");
+    await expect(t).toHaveValue(want);
+  }
+  for (const want of ["a", "ab", "abc"]) {
+    await page.keyboard.press("ControlOrMeta+Shift+z");
+    await expect(t).toHaveValue(want);
+  }
+});
+
+test("TXT-03b history holds at least 100 steps", async ({ page }) => {
+  await menu(page, "✦", "New TextEdit Document");
+  const t = win(page, "textedit").first().locator("textarea");
+  await t.evaluate((el: HTMLTextAreaElement) => {
+    for (let i = 0; i < 120; i++) {
+      el.value += "x";
+      el.dispatchEvent(new InputEvent("input", { bubbles: true }));
+    }
+  });
+  await t.focus();
+  for (let i = 0; i < 105; i++) await page.keyboard.press("ControlOrMeta+z");
+  await expect(t).toHaveValue("x".repeat(15));
+});
+
+test("TXT-04 renaming the open file in Finder retitles TextEdit; Save writes to the new path", async ({ page }) => {
+  const f = win(page, "finder").first();
+  await f.locator('tr[data-name="Welcome.txt"]').dblclick();
+  const te = win(page, "textedit").first();
+  await expect(te.locator(".title")).toHaveText("Welcome.txt");
+  await menu(page, "Window", "Documents"); // raise Finder; TextEdit sits on top of it
+  await expect(f).toHaveAttribute("data-focused", "true");
+  await f.locator('tr[data-name="Welcome.txt"]').click();
+  await menu(page, "File", "Rename");
+  await f.locator("input.rename").fill("Hello.txt");
+  await f.locator("input.rename").press("Enter");
+  await expect(te.locator(".title")).toHaveText("Hello.txt");
+  await menu(page, "Window", "Hello.txt");
+  await te.locator("textarea").fill("renamed, then saved");
+  await page.keyboard.press("ControlOrMeta+s");
+  await expect(te.locator(".title")).toHaveText("Hello.txt");
+  expect(await read(page, "/Documents/Hello.txt")).toBe("renamed, then saved");
+  expect(await exists(page, "/Documents/Welcome.txt")).toBe(false);
+});
+
+test("TXT-06 Find shows the match count; Enter cycles and wraps", async ({ page }) => {
+  await menu(page, "✦", "New TextEdit Document");
+  const te = win(page, "textedit").first();
+  const t = te.locator("textarea");
+  await t.fill("foo bar foo baz FOO");
+  await page.keyboard.press("ControlOrMeta+f");
+  const find = te.getByRole("textbox", { name: "Find" });
+  await expect(find).toBeFocused();
+  await find.fill("foo");
+  const count = te.locator(".findbar .count");
+  await expect(count).toHaveText("1 of 3");
+  await find.press("Enter");
+  await expect(count).toHaveText("2 of 3");
+  expect(await t.evaluate((el: HTMLTextAreaElement) => [el.selectionStart, el.selectionEnd])).toEqual([8, 11]);
+  await find.press("Enter");
+  await find.press("Enter");
+  await expect(count).toHaveText("1 of 3");
+  await find.fill("zzz");
+  await expect(count).toHaveText("No matches");
+  await find.press("Escape");
+  await expect(te.locator(".findbar")).toHaveCount(0);
+});
+
+test("TXT-04b a case-only rename of the open file does not raise a false conflict", async ({ page }) => {
+  await win(page, "finder").first().locator('tr[data-name="Welcome.txt"]').dblclick();
+  const te = win(page, "textedit").first();
+  await page.evaluate(() => window.cauldron.shell.kernel.vfs.rename({ actor: { kind: "user", id: "user" } }, "/Documents/Welcome.txt", "WELCOME.txt"));
+  await expect(te.locator(".title")).toHaveText("WELCOME.txt");
+  await expect(te.locator(".banner")).toBeHidden();
+  await te.locator("textarea").fill("still mine");
+  await page.keyboard.press("ControlOrMeta+s");
+  await expect(te.locator(".title")).toHaveText("WELCOME.txt");
+  expect(await read(page, "/Documents/WELCOME.txt")).toBe("still mine");
+});
+
+test("TXT-06b every match is highlighted; the current one is marked", async ({ page }) => {
+  await menu(page, "✦", "New TextEdit Document");
+  const te = win(page, "textedit").first();
+  await te.locator("textarea").fill("foo bar foo baz FOO");
+  await page.keyboard.press("ControlOrMeta+f");
+  await te.getByRole("textbox", { name: "Find" }).fill("foo");
+  await expect(te.locator(".hl mark")).toHaveCount(3);
+  await te.getByRole("textbox", { name: "Find" }).press("Enter");
+  await expect(te.locator(".hl mark.current")).toHaveText("foo");
+  expect(await te.locator(".hl mark").evaluateAll((ms) => ms.findIndex((m) => m.classList.contains("current")))).toBe(1);
+  await te.getByRole("textbox", { name: "Find" }).press("Escape");
+  await expect(te.locator(".hl mark")).toHaveCount(0);
+});
+
+test("WM-04b the resize grip stays on top of window content (TextEdit)", async ({ page }) => {
+  await menu(page, "✦", "New TextEdit Document");
+  const g = (await win(page, "textedit").first().locator(".resize").boundingBox())!;
+  const hit = await page.evaluate(([x, y]) => (document.elementFromPoint(x!, y!) as HTMLElement).className, [g.x + 8, g.y + 8]);
+  expect(hit).toBe("resize");
+});
diff --git a/apps/shell/e2e/screenshots.spec.ts b/apps/shell/e2e/screenshots.spec.ts
index ccebafb..dc8115f 100644
--- a/apps/shell/e2e/screenshots.spec.ts
+++ b/apps/shell/e2e/screenshots.spec.ts
@@ -30,3 +30,22 @@ test("capture: shared desktop with a familiar at work", async ({ page }) => {
   await page.locator('.dialog[data-kind="consent"] button', { hasText: "Not now" }).click();
   await pending;
 });
+
+test("capture: desktop icons, full Trash, and TextEdit find", async ({ page }) => {
+  await page.goto("/");
+  await page.evaluate(async () => {
+    const { vfs } = window.cauldron.shell.kernel;
+    const u = { actor: { kind: "user" as const, id: "user" } };
+    await vfs.create(u, "/Desktop/Ideas", "folder");
+    await vfs.create(u, "/Desktop/todo.txt", "file", { content: "foo bar foo baz FOO" });
+    await vfs.create(u, "/Desktop/old.txt", "file");
+    await vfs.trash(u, "/Desktop/old.txt");
+  });
+  await page.locator('.desk-icon[data-name="todo.txt"]').dblclick();
+  const te = page.locator('section.win[data-app="textedit"]').first();
+  await expect(te.locator("textarea")).toHaveValue(/foo/);
+  await page.keyboard.press("ControlOrMeta+f");
+  await te.getByRole("textbox", { name: "Find" }).fill("foo");
+  await te.getByRole("textbox", { name: "Find" }).press("Enter");
+  await page.screenshot({ path: `${dir}/05-desktop-icons-find.png` });
+});
diff --git a/apps/shell/playwright.config.ts b/apps/shell/playwright.config.ts
index 34debca..c5dc9a0 100644
--- a/apps/shell/playwright.config.ts
+++ b/apps/shell/playwright.config.ts
@@ -6,14 +6,15 @@ export default defineConfig({
   fullyParallel: true,
   reporter: process.env.CI ? [["list"], ["github"]] : "list",
   use: {
-    baseURL: "http://127.0.0.1:5178",
+    baseURL: "http://127.0.0.1:5188",
     ...devices["Desktop Chrome"],
     viewport: { width: 1280, height: 800 },
   },
   webServer: {
     command: "npx vite --host 127.0.0.1",
-    url: "http://127.0.0.1:5178",
-    reuseExistingServer: !process.env.CI,
+    url: "http://127.0.0.1:5188",
+    // Never reuse: a server left running from another checkout would test the wrong code.
+    reuseExistingServer: false,
     timeout: 60_000,
   },
 });
diff --git a/apps/shell/src/desktop-icons.ts b/apps/shell/src/desktop-icons.ts
new file mode 100644
index 0000000..436f6da
--- /dev/null
+++ b/apps/shell/src/desktop-icons.ts
@@ -0,0 +1,62 @@
+import { USER } from "@opencoven/cauldron";
+import { makeDraggable, makeDropTarget } from "./dnd.ts";
+import type { Shell } from "./shell.ts";
+
+const u = { actor: USER };
+
+/**
+ * The desktop background: /Desktop's contents as icons in a right-aligned
+ * grid, plus the Trash bottom-right (spec §6.9). Sits under every window.
+ */
+export class DesktopIcons {
+  readonly el = document.createElement("div");
+  #shell: Shell;
+  #selected: string | null = null;
+
+  constructor(shell: Shell) {
+    this.#shell = shell;
+    this.el.id = "desktop-icons";
+    makeDropTarget(shell, this.el, () => "/Desktop");
+    this.el.addEventListener("pointerdown", (e) => {
+      if (e.target === this.el) this.select(null);
+    });
+  }
+
+  /** Toggle selection in place — re-rendering here would swap the element mid double-click. */
+  select(name: string | null) {
+    this.#selected = name;
+    for (const el of this.el.querySelectorAll<HTMLElement>(".desk-icon")) {
+      el.classList.toggle("selected", el.dataset.name === name);
+    }
+  }
+
+  render() {
+    const vfs = this.#shell.kernel.vfs;
+    const items = vfs.exists(u, "/Desktop") ? vfs.list(u, "/Desktop") : [];
+    const trashFull = vfs.exists(u, "/Trash") && vfs.list(u, "/Trash").length > 0;
+    this.el.replaceChildren();
+    items.forEach((s, i) => {
+      const icon = document.createElement("div");
+      icon.className = "desk-icon" + (s.node.name === this.#selected ? " selected" : "");
+      icon.dataset.name = s.node.name;
+      icon.dataset.kind = s.node.kind;
+      icon.style.top = `${12 + i * 92}px`;
+      icon.innerHTML = `<div class="glyph">${s.node.kind === "folder" ? "▣" : "▤"}</div><div class="label"></div>`;
+      icon.querySelector(".label")!.textContent = s.node.name;
+      icon.onpointerdown = () => this.select(s.node.name);
+      icon.ondblclick = () =>
+        s.node.kind === "folder" ? this.#shell.launch("finder", { path: s.path }) : this.#shell.openFile(s.path);
+      makeDraggable(icon, () => s.path);
+      if (s.node.kind === "folder") makeDropTarget(this.#shell, icon, () => s.path, { stop: true });
+      this.el.append(icon);
+    });
+    const trash = document.createElement("div");
+    trash.className = "desk-icon trash";
+    trash.dataset.name = "Trash";
+    trash.dataset.full = String(trashFull);
+    trash.innerHTML = `<div class="glyph">${trashFull ? "▦" : "□"}</div><div class="label">Trash</div>`;
+    trash.ondblclick = () => this.#shell.launch("finder", { path: "/Trash" });
+    makeDropTarget(this.#shell, trash, () => "trash", { stop: true });
+    this.el.append(trash);
+  }
+}
diff --git a/apps/shell/src/dnd.ts b/apps/shell/src/dnd.ts
new file mode 100644
index 0000000..31ca58f
--- /dev/null
+++ b/apps/shell/src/dnd.ts
@@ -0,0 +1,60 @@
+import { KernelError, USER } from "@opencoven/cauldron";
+import { dialog, esc } from "./dialogs.ts";
+import { explain } from "./finder.ts";
+import type { Shell } from "./shell.ts";
+
+/** Drag payload: VFS paths, newline-separated. */
+export const DRAG_MIME = "application/x-cauldron-paths";
+const u = { actor: USER };
+
+export function makeDraggable(el: HTMLElement, path: () => string) {
+  el.draggable = true;
+  el.addEventListener("dragstart", (e) => {
+    e.dataTransfer!.setData(DRAG_MIME, path());
+    e.dataTransfer!.effectAllowed = "copyMove";
+  });
+}
+
+export const carriesPaths = (e: DragEvent) => Boolean(e.dataTransfer?.types.includes(DRAG_MIME));
+
+/**
+ * Make `el` a drop target. `dest()` names the folder (or "trash").
+ * Plain drop moves; Alt/Option-drop copies (spec §6.7).
+ */
+export function makeDropTarget(shell: Shell, el: HTMLElement, dest: () => string | "trash", opts: { stop?: boolean } = {}) {
+  el.addEventListener("dragover", (e) => {
+    if (!carriesPaths(e)) return;
+    e.preventDefault();
+    if (opts.stop) e.stopPropagation();
+    e.dataTransfer!.dropEffect = e.altKey ? "copy" : "move";
+    el.classList.add("drop-hover");
+  });
+  el.addEventListener("dragleave", () => el.classList.remove("drop-hover"));
+  el.addEventListener("drop", (e) => {
+    if (!carriesPaths(e)) return;
+    e.preventDefault();
+    if (opts.stop) e.stopPropagation();
+    el.classList.remove("drop-hover");
+    const paths = e.dataTransfer!.getData(DRAG_MIME).split("\n").filter(Boolean);
+    void dropPaths(shell, paths, dest(), e.altKey);
+  });
+}
+
+export async function dropPaths(shell: Shell, paths: string[], dest: string | "trash", copy: boolean) {
+  const vfs = shell.kernel.vfs;
+  for (const p of paths) {
+    try {
+      if (!vfs.exists(u, p)) continue;
+      if (dest === "trash") {
+        await vfs.trash(u, p);
+        continue;
+      }
+      const parent = p.slice(0, p.lastIndexOf("/")) || "/";
+      if (copy) await vfs.copy(u, p, dest);
+      else if (parent.toLowerCase() !== dest.toLowerCase()) await vfs.move(u, p, dest);
+    } catch (err) {
+      const msg = err instanceof KernelError ? explain(err) : String(err);
+      await dialog({ html: esc(msg), buttons: [{ id: "ok", label: "OK", primary: true }] });
+    }
+  }
+}
diff --git a/apps/shell/src/finder.ts b/apps/shell/src/finder.ts
index e71dde8..fd2da29 100644
--- a/apps/shell/src/finder.ts
+++ b/apps/shell/src/finder.ts
@@ -1,5 +1,6 @@
 import { KernelError, USER, type KernelEvent, type Stat } from "@opencoven/cauldron";
 import { dialog, esc } from "./dialogs.ts";
+import { makeDraggable, makeDropTarget } from "./dnd.ts";
 import type { Shell } from "./shell.ts";
 import type { AppView, Menu } from "./types.ts";
 
@@ -231,6 +232,7 @@ export class FinderView implements AppView {
 
     const scroll = document.createElement("div");
     scroll.className = "scroll";
+    makeDropTarget(this.#shell, scroll, () => this.path);
     const table = document.createElement("table");
     table.className = "list";
     const head = document.createElement("tr");
@@ -285,6 +287,8 @@ export class FinderView implements AppView {
         this.render();
       };
       tr.ondblclick = () => this.open(n.name);
+      if (this.#renaming !== n.name) makeDraggable(tr, () => s.path);
+      if (n.kind === "folder") makeDropTarget(this.#shell, tr, () => s.path, { stop: true });
       tbody.append(tr);
     }
     table.append(thead, tbody);
diff --git a/apps/shell/src/shell.ts b/apps/shell/src/shell.ts
index cb918f2..7f56e3a 100644
--- a/apps/shell/src/shell.ts
+++ b/apps/shell/src/shell.ts
@@ -10,6 +10,7 @@ import {
   type WmSnapshot,
 } from "@opencoven/cauldron";
 import { dialog, esc } from "./dialogs.ts";
+import { DesktopIcons } from "./desktop-icons.ts";
 import { FinderView, cap } from "./finder.ts";
 import { DESKTOP_KEY, LocalStorageAdapter } from "./storage.ts";
 import { TextEditView } from "./textedit.ts";
@@ -58,6 +59,7 @@ export class Shell {
   #untitled = 0;
   #openMenu: string | null = null;
   #restoring = false;
+  icons!: DesktopIcons;
 
   readonly desktop: HTMLElement;
   readonly menubar: HTMLElement;
@@ -72,6 +74,8 @@ export class Shell {
     });
     this.kernel.apps.register(FINDER);
     this.kernel.apps.register(TEXTEDIT);
+    this.icons = new DesktopIcons(this);
+    this.desktop.append(this.icons.el);
     this.kernel.bus.subscribe((e) => this.#onEvent(e));
     addEventListener("resize", () => {
       this.kernel.wm.setViewport({ w: innerWidth, h: innerHeight });
@@ -93,6 +97,7 @@ export class Shell {
     }
     this.#restoring = false;
     if (this.kernel.wm.list().length === 0) this.launch("finder", { path: "/Documents" });
+    this.icons.render();
     this.render();
     this.persist();
   }
@@ -170,7 +175,10 @@ export class Shell {
       const w = this.kernel.wm.get(e.windowId as string);
       if (!this.#views.has(w.id)) this.#createView(w, this.#pending ?? {});
     }
-    if (e.type === "vfs:changed") for (const v of this.#views.values()) v.onVfs(e);
+    if (e.type === "vfs:changed") {
+      for (const v of this.#views.values()) v.onVfs(e);
+      this.icons.render();
+    }
     if (e.type.startsWith("window:")) {
       this.render();
       if (!this.#restoring) this.persist();
@@ -266,6 +274,9 @@ export class Shell {
   #drag(handle: HTMLElement, id: string, apply: (dx: number, dy: number, start: { x: number; y: number; w: number; h: number }) => void) {
     handle.addEventListener("pointerdown", (e) => {
       if ((e.target as HTMLElement).closest("button")) return;
+      // Stop native drag/selection: once the window moves, the browser would otherwise
+      // hit-test the original press point and start dragging whatever is now beneath it.
+      e.preventDefault();
       const start = { ...this.kernel.wm.get(id).rect };
       const ox = e.clientX;
       const oy = e.clientY;
diff --git a/apps/shell/src/slate.css b/apps/shell/src/slate.css
index e103310..27cd29a 100644
--- a/apps/shell/src/slate.css
+++ b/apps/shell/src/slate.css
@@ -42,7 +42,7 @@ button:focus-visible, input:focus-visible, textarea:focus-visible { outline: 2px
 .owner { font-size: 11px; color: var(--paper); background: var(--agent); padding: 0 6px; border-radius: 2px; }
 .badge { width: 8px; height: 8px; border-radius: 50%; background: var(--agent); }
 .content { flex: 1; min-height: 0; overflow: auto; position: relative; }
-.resize { position: absolute; right: 0; bottom: 0; width: 16px; height: 16px; cursor: nwse-resize; background: linear-gradient(135deg, transparent 50%, var(--line) 50% 58%, transparent 58% 70%, var(--line) 70% 78%, transparent 78%); touch-action: none; }
+.resize { position: absolute; z-index: 5; right: 0; bottom: 0; width: 16px; height: 16px; cursor: nwse-resize; background: linear-gradient(135deg, transparent 50%, var(--line) 50% 58%, transparent 58% 70%, var(--line) 70% 78%, transparent 78%); touch-action: none; }
 
 .toolbar { display: flex; gap: 4px; padding: 4px; border-bottom: 1px solid var(--line); align-items: center; }
 .path { flex: 1; font-family: ui-monospace, monospace; font-size: 12px; padding: 1px 4px; border: 1px solid transparent; }
@@ -58,7 +58,12 @@ table.list { width: 100%; border-collapse: collapse; }
 .finder .scroll { flex: 1; overflow: auto; }
 
 .textedit { display: flex; flex-direction: column; height: 100%; }
-.textedit textarea { flex: 1; border: 0; resize: none; padding: 8px; font: 13px/1.5 ui-monospace, monospace; background: #fff; color: var(--ink); }
+.textedit .editor { flex: 1; min-height: 0; position: relative; background: #fff; }
+.textedit textarea, .textedit .hl { position: absolute; inset: 0; margin: 0; border: 0; padding: 8px; font: 13px/1.5 ui-monospace, monospace; white-space: pre-wrap; overflow-wrap: break-word; }
+.textedit textarea { resize: none; background: transparent; color: var(--ink); z-index: 1; overflow: auto; }
+.textedit .hl { color: transparent; overflow: hidden; pointer-events: none; }
+.textedit .hl mark { color: transparent; background: #d9ecec; border-radius: 1px; }
+.textedit .hl mark.current { background: #f2c14e; }
 .banner { background: #efe6fa; border-bottom: 1px solid var(--agent); padding: 4px 8px; display: flex; gap: 6px; align-items: center; }
 .banner span { flex: 1; }
 
@@ -75,3 +80,18 @@ table.list { width: 100%; border-collapse: collapse; }
 .dialog .primary { font-weight: 600; border-width: 2px; }
 .dialog label { display: block; margin-bottom: 10px; }
 .dialog input { font: inherit; width: 100%; margin-top: 4px; padding: 2px 4px; border: 1px solid var(--line); }
+
+/* Desktop icons (spec §6.9) — sit beneath every window */
+#desktop-icons { position: absolute; inset: 0; z-index: 0; }
+.desk-icon { position: absolute; right: 16px; width: 80px; text-align: center; user-select: none; color: var(--paper); }
+.desk-icon .glyph { font-size: 36px; line-height: 44px; }
+.desk-icon .label { font-size: 12px; padding: 0 3px; word-break: break-word; }
+.desk-icon.selected .label { background: var(--ink); color: var(--paper); }
+.desk-icon.trash { top: auto; bottom: 16px; }
+.drop-hover { outline: 2px dashed var(--accent); outline-offset: -2px; }
+.desk-icon.drop-hover .glyph { color: #fff; }
+
+/* TextEdit find bar (spec §7.4) */
+.findbar { display: flex; gap: 4px; align-items: center; padding: 3px 6px; border-bottom: 1px solid var(--line); }
+.findbar input { flex: 1; font: inherit; padding: 1px 4px; border: 1px solid var(--line); }
+.findbar .count { font-size: 11px; color: var(--muted); min-width: 56px; text-align: right; }
diff --git a/apps/shell/src/textedit.ts b/apps/shell/src/textedit.ts
index 0617f03..ff07243 100644
--- a/apps/shell/src/textedit.ts
+++ b/apps/shell/src/textedit.ts
@@ -17,7 +17,14 @@ export class TextEditView implements AppView {
   #untitled: string;
   #text: HTMLTextAreaElement;
   #banner: HTMLDivElement;
+  #hl: HTMLDivElement;
   #shell: Shell;
+  /** Own history (spec §7.4: ≥100 steps). Native undo breaks on programmatic value changes. */
+  #past: string[] = [];
+  #future: string[] = [];
+  #last = "";
+  #find: { bar: HTMLDivElement; input: HTMLInputElement; count: HTMLSpanElement; idx: number; hits: number[] } | null = null;
+  static readonly HISTORY = 500;
 
   readonly windowId: string;
 
@@ -32,15 +39,31 @@ export class TextEditView implements AppView {
     this.#text.spellcheck = false;
     this.#text.setAttribute("aria-label", "Document");
     this.#text.oninput = () => {
-      localStorage.setItem(draftKey(this.windowId), this.#text.value);
-      this.#retitle();
+      this.#past.push(this.#last);
+      if (this.#past.length > TextEditView.HISTORY) this.#past.shift();
+      this.#future = [];
+      this.#last = this.#text.value;
+      this.#changed();
     };
-    this.el.append(this.#banner, this.#text);
+    // Highlight layer behind a transparent textarea: find matches stay visible while
+    // focus is in the find field (a textarea hides its selection when unfocused).
+    const editor = document.createElement("div");
+    editor.className = "editor";
+    this.#hl = document.createElement("div");
+    this.#hl.className = "hl";
+    this.#hl.setAttribute("aria-hidden", "true");
+    this.#text.addEventListener("scroll", () => {
+      this.#hl.scrollTop = this.#text.scrollTop;
+      this.#hl.scrollLeft = this.#text.scrollLeft;
+    });
+    editor.append(this.#hl, this.#text);
+    this.el.append(this.#banner, editor);
     this.#untitled = state.untitled ?? shell.nextUntitled();
     this.path = null;
     if (state.path && shell.kernel.vfs.exists(u, state.path)) this.#load(state.path);
     const draft = localStorage.getItem(draftKey(windowId));
     if (draft !== null && draft !== this.#saved) this.#text.value = draft;
+    this.#last = this.#text.value;
     this.#retitle();
   }
 
@@ -66,18 +89,139 @@ export class TextEditView implements AppView {
           { label: "Save As…", shortcut: "⇧⌘S", action: () => void this.saveAs() },
         ],
       },
+      {
+        title: "Edit",
+        items: [
+          { label: "Undo", shortcut: "⌘Z", disabled: this.#past.length === 0, action: () => this.undo() },
+          { label: "Redo", shortcut: "⇧⌘Z", disabled: this.#future.length === 0, action: () => this.redo() },
+          { label: "Find…", shortcut: "⌘F", action: () => this.openFind() },
+        ],
+      },
     ];
   }
 
   onKey(e: KeyboardEvent): boolean {
     const mod = e.metaKey || e.ctrlKey;
-    if (mod && e.key.toLowerCase() === "s") {
+    const k = e.key.toLowerCase();
+    if (mod && k === "s") {
       void (e.shiftKey ? this.saveAs() : this.save());
       return true;
     }
+    if (mod && k === "z") return e.shiftKey ? this.redo() : this.undo(), true;
+    if (mod && k === "y") return this.redo(), true;
+    if (mod && k === "f") return this.openFind(), true;
     return false;
   }
 
+  undo() {
+    const prev = this.#past.pop();
+    if (prev === undefined) return;
+    this.#future.push(this.#text.value);
+    this.#apply(prev);
+  }
+
+  redo() {
+    const next = this.#future.pop();
+    if (next === undefined) return;
+    this.#past.push(this.#text.value);
+    this.#apply(next);
+  }
+
+  #apply(value: string) {
+    this.#text.value = value;
+    this.#last = value;
+    this.#changed();
+  }
+
+  #changed() {
+    localStorage.setItem(draftKey(this.windowId), this.#text.value);
+    this.#retitle();
+    if (this.#find) this.#search(false);
+  }
+
+  // ---------- find (spec §7.4) ----------
+
+  openFind() {
+    if (!this.#find) {
+      const bar = document.createElement("div");
+      bar.className = "findbar";
+      const input = document.createElement("input");
+      input.setAttribute("aria-label", "Find");
+      input.placeholder = "Find";
+      const count = document.createElement("span");
+      count.className = "count";
+      const btn = (label: string, title: string, fn: () => void) => {
+        const b = document.createElement("button");
+        b.textContent = label;
+        b.setAttribute("aria-label", title);
+        b.onclick = fn;
+        return b;
+      };
+      bar.append(input, count, btn("‹", "Previous match", () => this.#step(-1)), btn("›", "Next match", () => this.#step(1)), btn("Done", "Close find", () => this.closeFind()));
+      input.oninput = () => this.#search(true);
+      input.onkeydown = (e) => {
+        e.stopPropagation();
+        if (e.key === "Enter") { e.preventDefault(); this.#step(e.shiftKey ? -1 : 1); }
+        if (e.key === "Escape") { e.preventDefault(); this.closeFind(); }
+      };
+      this.#find = { bar, input, count, idx: -1, hits: [] };
+      this.#banner.after(bar);
+    }
+    this.#find.input.focus();
+    this.#find.input.select();
+  }
+
+  closeFind() {
+    this.#find?.bar.remove();
+    this.#find = null;
+    this.#hl.replaceChildren();
+    this.#text.focus();
+  }
+
+  #search(jump: boolean) {
+    const f = this.#find!;
+    const q = f.input.value.toLowerCase();
+    const hay = this.#text.value.toLowerCase();
+    f.hits = [];
+    if (q) for (let i = hay.indexOf(q); i !== -1; i = hay.indexOf(q, i + Math.max(1, q.length))) f.hits.push(i);
+    if (f.hits.length === 0) f.idx = -1;
+    else if (jump || f.idx < 0 || f.idx >= f.hits.length) f.idx = 0;
+    this.#showHit();
+  }
+
+  #step(dir: 1 | -1) {
+    const f = this.#find;
+    if (!f || f.hits.length === 0) return;
+    f.idx = (f.idx + dir + f.hits.length) % f.hits.length;
+    this.#showHit();
+  }
+
+  #showHit() {
+    const f = this.#find!;
+    f.count.textContent = !f.input.value ? "" : f.hits.length === 0 ? "No matches" : `${f.idx + 1} of ${f.hits.length}`;
+    const len = f.input.value.length;
+    if (f.idx >= 0) {
+      const start = f.hits[f.idx]!;
+      this.#text.setSelectionRange(start, start + len);
+    }
+    // Paint every match; the current one is marked "current".
+    const text = this.#text.value;
+    const frag = document.createDocumentFragment();
+    let at = 0;
+    f.hits.forEach((h, i) => {
+      frag.append(text.slice(at, h));
+      const m = document.createElement("mark");
+      if (i === f.idx) m.className = "current";
+      m.textContent = text.slice(h, h + len);
+      frag.append(m);
+      at = h + len;
+    });
+    frag.append(text.slice(at) + "\n");
+    this.#hl.replaceChildren(frag);
+    this.#hl.scrollTop = this.#text.scrollTop;
+    this.el.querySelector("mark.current")?.scrollIntoView({ block: "nearest" });
+  }
+
   focusText() {
     this.#text.focus();
   }
@@ -90,6 +234,9 @@ export class TextEditView implements AppView {
     this.#loadedRev = r.rev;
     this.#saved = r.content;
     this.#text.value = r.content;
+    this.#last = r.content;
+    this.#past = [];
+    this.#future = [];
     this.#shell.setDocumentPath(this.windowId, st.path);
   }
 
@@ -183,7 +330,9 @@ export class TextEditView implements AppView {
       const candidates = dest === "/Trash" ? [] : [dest, dest && `${dest}/${this.name}`].filter(Boolean) as string[];
       const found = candidates.find((p) => vfs.exists(u, p) && vfs.stat(u, p).node.id === this.#nodeId);
       if (found) {
-        this.path = vfs.stat(u, found).path;
+        const moved = vfs.stat(u, found);
+        this.path = moved.path;
+        this.#loadedRev = moved.node.rev; // rename/move bumps rev but not content
         this.#shell.setDocumentPath(this.windowId, this.path);
         this.#retitle();
         this.#shell.persist();
@@ -201,6 +350,16 @@ export class TextEditView implements AppView {
     if (!vfs.exists(u, this.path)) return;
     const st = vfs.stat(u, this.path);
     if (st.node.id !== this.#nodeId || st.node.rev <= this.#loadedRev) return;
+    if ((st.node.content ?? "") === this.#saved) {
+      // Metadata-only change (e.g. case-only rename): adopt the new rev and path quietly.
+      this.#loadedRev = st.node.rev;
+      if (st.path !== this.path) {
+        this.path = st.path;
+        this.#shell.setDocumentPath(this.windowId, st.path);
+        this.#retitle();
+      }
+      return;
+    }
     if (e.actor.kind === "user" && !this.dirty) {
       this.reload();
       return;
diff --git a/apps/shell/vite.config.ts b/apps/shell/vite.config.ts
index c0692a6..dda0b91 100644
--- a/apps/shell/vite.config.ts
+++ b/apps/shell/vite.config.ts
@@ -1,5 +1,5 @@
 import { defineConfig } from "vite";
 
 export default defineConfig({
-  server: { port: 5178, strictPort: true },
+  server: { port: 5188, strictPort: true },
 });