diff --git a/harbour/ChangeLog b/harbour/ChangeLog
index 341588a5e7..8ff858c489 100644
--- a/harbour/ChangeLog
+++ b/harbour/ChangeLog
@@ -17,6 +17,31 @@
    past entries belonging to author(s): Viktor Szakats.
 */
 
+2009-08-01 15:35 UTC+0200 Viktor Szakats (harbour.01 syenar.hu)
+  * config/global.cf
+  * config/lib.cf
+  * config/bin.cf
+  * config/globsh.cf
+  * config/instsh.cf
+  * config/none.cf
+  * config/dirsh.cf
+    ! Using embedded GNU Tools on OS/2. This fixes the install dir
+      creation problems (at least makes it work like on other platforms).
+      Fixes HB_BUILD_SUBDIR support. It also allowed to remove all
+      remaining hacks to try to create dirs for platforms where 'mkdir -p'
+      equivalent isn't available.
+      Probably it would be better to solve this using some GNU Make
+      tricks, but couldn't find one yet.
+    % Using native DOS commands for RM and MD. (MD is not used currently)
+    * EXE_DIR, LIB_DIR moved to global.cf
+    % Deleted (I hope) unnecessary $(CMDPREF) variables.
+      If someone knows what was the purpose of them, we can readd them, but
+      we should then readd them to all shell types and all commands consistently.
+    ! Fixed nt dir walking rule for old GNU Make versions.
+
+  + config/os2-rm.exe
+    + Added OS/2 GNU rm binary.
+
 2009-08-01 14:43 UTC+0200 Viktor Szakats (harbour.01 syenar.hu)
   * config/global.cf
     + Minor improvements.
diff --git a/harbour/config/bin.cf b/harbour/config/bin.cf
index 054c7fc905..270dd0a147 100644
--- a/harbour/config/bin.cf
+++ b/harbour/config/bin.cf
@@ -7,11 +7,6 @@ include $(TOP)$(ROOT)config/global.cf
 ifneq ($(HB_ARCHITECTURE),)
 ifneq ($(HB_COMPILER),)
 
-# no slash at the end
-EXE_ARCH_DIR := $(TOP)$(ROOT)bin/$(HB_ARCHITECTURE)
-# no slash at the end
-EXE_DIR := $(TOP)$(ROOT)bin/$(ARCH_COMP)
-
 include $(TOP)$(ROOT)config/c.cf
 include $(TOP)$(ROOT)config/prg.cf
 
@@ -33,8 +28,6 @@ endif
 
 EXE_FILE := $(EXE_DIR)/$(EXE_NAME)
 
-LIB_DIR := $(TOP)$(ROOT)lib/$(ARCH_COMP)
-
 ALL_OBJS = $(ALL_C_OBJS) $(ALL_PRG_OBJS)
 
 first:: dirbase descend
diff --git a/harbour/config/dirsh.cf b/harbour/config/dirsh.cf
index 2ca85e059f..1c0b474c42 100644
--- a/harbour/config/dirsh.cf
+++ b/harbour/config/dirsh.cf
@@ -30,14 +30,14 @@ endif
 ifeq ($(HB_SHELL),nt)
 
 DIR_RULE =\
-	$(CMDPREF)for %d in ($(DIRS_OS)) do $(MK_OS) -C %d $@
+	for %%d in ($(DIRS_OS)) do $(MK_OS) -C %%d $@
 
 endif
 
 ifeq ($(HB_SHELL),os2)
 
 DIR_RULE =\
-	$(CMDPREF)for %d in ($(DIRS_OS)) do $(MK_OS) -C %d $@
+	for %d in ($(DIRS_OS)) do $(MK_OS) -C %d $@
 
 endif
 
diff --git a/harbour/config/global.cf b/harbour/config/global.cf
index 535b810140..4298bdba01 100644
--- a/harbour/config/global.cf
+++ b/harbour/config/global.cf
@@ -337,9 +337,9 @@ ARCH_COMP := $(HB_ARCHITECTURE)/$(HB_COMPILER)
 ifneq ($(HB_BUILD_SUBDIR),)
    ARCH_COMP += /$(subst \,/,$(HB_BUILD_SUBDIR))
 endif
-OBJ_BASE := obj
-OBJ_DIR := $(OBJ_BASE)/$(ARCH_COMP)
-OBJ_ARCH_DIR := $(OBJ_BASE)/$(HB_ARCHITECTURE)
+OBJ_DIR := obj/$(ARCH_COMP)
+EXE_DIR := $(TOP)$(ROOT)bin/$(ARCH_COMP)
+LIB_DIR := $(TOP)$(ROOT)lib/$(ARCH_COMP)
 
 # TODO: Set this in <arch>/<comp>.cf
 HB_CPU :=
diff --git a/harbour/config/globsh.cf b/harbour/config/globsh.cf
index 05fc966928..b608923608 100644
--- a/harbour/config/globsh.cf
+++ b/harbour/config/globsh.cf
@@ -50,23 +50,23 @@ ifeq ($(HB_SHELL),nt)
 MK = "$(subst \,/,$(subst \~,~,$(MAKE)))"
 RM = del /q /f
 RDP = rmdir /q /s
-CP = $(CMDPREF)copy
+CP = copy
 MD = mkdir
 MDP = mkdir
 
 dirbase::
-	-@$(CMDPREF)if not exist "$(OBJ_DIR_OS)" $(MDP) "$(OBJ_DIR_OS)"
-	$(if $(LIB_FILE),-@$(CMDPREF)if not exist "$(LIB_DIR_OS)" $(MDP) "$(LIB_DIR_OS)",)
-	$(if $(EXE_FILE),-@$(CMDPREF)if not exist "$(EXE_DIR_OS)" $(MDP) "$(EXE_DIR_OS)",)
+	-@if not exist "$(OBJ_DIR_OS)" $(MDP) "$(OBJ_DIR_OS)"
+	$(if $(LIB_FILE),-@if not exist "$(LIB_DIR_OS)" $(MDP) "$(LIB_DIR_OS)",)
+	$(if $(EXE_FILE),-@if not exist "$(EXE_DIR_OS)" $(MDP) "$(EXE_DIR_OS)",)
 
 clean::
-	-@$(CMDPREF)if exist "$(OBJ_DIR_OS)" $(RDP) "$(OBJ_DIR_OS)"
-	$(if $(LIB_FILE),-@$(CMDPREF)if exist "$(LIB_FILE_OS)" $(RM) "$(LIB_FILE_OS)",)
-	$(if $(LIB_FILE),-@$(CMDPREF)if exist "$(basename $(LIB_FILE_OS)).bak" $(RM) "$(basename $(LIB_FILE_OS)).bak",)
-	$(if $(LIB_FILE),-@$(CMDPREF)if exist "$(LIB_DIR_OS)" if not exist "$(LIB_DIR_OS)\*" $(RDP) "$(LIB_DIR_OS)",)
-	$(if $(EXE_FILE),-@$(CMDPREF)if exist "$(EXE_FILE_OS)" $(RM) "$(EXE_FILE_OS)",)
-	$(if $(EXE_FILE),-@$(CMDPREF)if exist "$(basename $(EXE_FILE_OS)).tds" $(RM) "$(basename $(EXE_FILE_OS)).tds",)
-	$(if $(EXE_FILE),-@$(CMDPREF)if exist "$(EXE_DIR_OS)" if not exist "$(EXE_DIR_OS)\*" $(RDP) "$(EXE_DIR_OS)",)
+	-@if exist "$(OBJ_DIR_OS)" $(RDP) "$(OBJ_DIR_OS)"
+	$(if $(LIB_FILE),-@if exist "$(LIB_FILE_OS)" $(RM) "$(LIB_FILE_OS)",)
+	$(if $(LIB_FILE),-@if exist "$(basename $(LIB_FILE_OS)).bak" $(RM) "$(basename $(LIB_FILE_OS)).bak",)
+	$(if $(LIB_FILE),-@if exist "$(LIB_DIR_OS)" if not exist "$(LIB_DIR_OS)\*" $(RDP) "$(LIB_DIR_OS)",)
+	$(if $(EXE_FILE),-@if exist "$(EXE_FILE_OS)" $(RM) "$(EXE_FILE_OS)",)
+	$(if $(EXE_FILE),-@if exist "$(basename $(EXE_FILE_OS)).tds" $(RM) "$(basename $(EXE_FILE_OS)).tds",)
+	$(if $(EXE_FILE),-@if exist "$(EXE_DIR_OS)" if not exist "$(EXE_DIR_OS)\*" $(RDP) "$(EXE_DIR_OS)",)
 
 endif
 
@@ -74,26 +74,20 @@ ifeq ($(HB_SHELL),os2)
 
 MK = $(subst /,\,$(subst \~,~,$(MAKE)))
 RM = del /n
-RD = rmdir
-CP = $(CMDPREF)copy
+RD = $(TOOL_DIR)os2-rm -f -r
+CP = copy
 MD = mkdir
-
-OBJ_ARCH_DIR_OS = $(subst /,\,$(OBJ_ARCH_DIR))
-LIB_ARCH_DIR_OS = $(subst /,\,$(LIB_ARCH_DIR))
-EXE_ARCH_DIR_OS = $(subst /,\,$(EXE_ARCH_DIR))
+MDP = $(TOOL_DIR)os2-mkdir -p
 
 dirbase::
-	-@for %d in ($(OBJ_BASE) $(OBJ_ARCH_DIR_OS) $(OBJ_DIR_OS)) do if not exist %d $(MD) %d
-	$(if $(LIB_FILE),-@for %d in ($(LIB_ARCH_DIR_OS) $(LIB_DIR_OS)) do if not exist %d $(MD) %d,)
-	$(if $(EXE_FILE),-@for %d in ($(EXE_ARCH_DIR_OS) $(EXE_DIR_OS)) do if not exist %d $(MD) %d,)
+	-@if not exist $(OBJ_DIR_OS) $(MDP) $(OBJ_DIR_OS)
+	$(if $(LIB_FILE),-@if not exist $(LIB_DIR_OS) $(MDP) $(LIB_DIR_OS),)
+	$(if $(EXE_FILE),-@if not exist $(EXE_DIR_OS) $(MDP) $(EXE_DIR_OS),)
 
 clean::
-	-@if exist $(OBJ_DIR_OS)\*.* $(RM) $(OBJ_DIR_OS)\*.*
-	-@for %d in ($(OBJ_DIR_OS) $(OBJ_ARCH_DIR_OS) $(OBJ_BASE)) do if exist %d $(RD) %d
-	$(if $(LIB_FILE),-@if exist $(LIB_FILE_OS) $(RM) $(LIB_FILE_OS),)
-	$(if $(LIB_FILE),-@for %d in ($(LIB_DIR_OS) $(LIB_ARCH_DIR_OS)) do if exist %d $(RD) %d,)
-	$(if $(EXE_FILE),-@if exist $(EXE_FILE_OS) $(RM) $(EXE_FILE_OS),)
-	$(if $(EXE_FILE),-@for %d in ($(EXE_DIR_OS) $(EXE_ARCH_DIR_OS)) do if exist %d $(RD) %d,)
+	-@$(RDP) $(OBJ_DIR_OS) $(LIB_FILE_OS) $(EXE_FILE_OS)
+	$(if $(LIB_FILE),-@if not exist $(LIB_DIR_OS) $(RDP) $(LIB_DIR_OS),)
+	$(if $(EXE_FILE),-@if not exist $(EXE_DIR_OS) $(RDP) $(EXE_DIR_OS),)
 
 endif
 
@@ -102,22 +96,22 @@ ifeq ($(HB_SHELL),dos)
 TOOL_DIR := $(subst /,\,$(TOP)$(ROOT)config/)
 
 MK = $(subst \,/,$(subst \~,~,$(MAKE)))
-RM = $(TOOL_DIR)dj-rm -f
+RM = del
 RDP = $(TOOL_DIR)dj-rm -f -r
 CP = $(TOOL_DIR)dj-cp -f
-MD = $(TOOL_DIR)dj-mkdir
+MD = mkdir
 MDP = $(TOOL_DIR)dj-mkdir -p
 
 dirbase::
-	-@$(CMDPREF)if not exist $(OBJ_DIR_OS)\nul $(MDP) $(OBJ_DIR_OS)
-	$(if $(LIB_FILE),-@$(CMDPREF)if not exist $(LIB_DIR_OS)\nul $(MDP) $(LIB_DIR_OS),)
-	$(if $(EXE_FILE),-@$(CMDPREF)if not exist $(EXE_DIR_OS)\nul $(MDP) $(EXE_DIR_OS),)
+	-@if not exist $(OBJ_DIR_OS)\nul $(MDP) $(OBJ_DIR_OS)
+	$(if $(LIB_FILE),-@if not exist $(LIB_DIR_OS)\nul $(MDP) $(LIB_DIR_OS),)
+	$(if $(EXE_FILE),-@if not exist $(EXE_DIR_OS)\nul $(MDP) $(EXE_DIR_OS),)
 
 clean::
 	-@$(RDP) $(OBJ_DIR_OS) $(LIB_FILE_OS) $(EXE_FILE_OS)
-	$(if $(LIB_FILE),-@$(CMDPREF)if exist $(basename $(LIB_FILE_OS)).bak $(RM) $(basename $(LIB_FILE_OS)).bak,)
-	$(if $(LIB_FILE),-@$(CMDPREF)if not exist $(LIB_DIR_OS)\*.* $(RDP) $(LIB_DIR_OS),)
-	$(if $(EXE_FILE),-@$(CMDPREF)if exist $(basename $(EXE_FILE_OS)).tds $(RM) $(basename $(EXE_FILE_OS)).tds,)
-	$(if $(EXE_FILE),-@$(CMDPREF)if not exist $(EXE_DIR_OS)\*.* $(RDP) $(EXE_DIR_OS),)
+	$(if $(LIB_FILE),-@if exist $(basename $(LIB_FILE_OS)).bak $(RM) $(basename $(LIB_FILE_OS)).bak,)
+	$(if $(LIB_FILE),-@if not exist $(LIB_DIR_OS)\*.* $(RDP) $(LIB_DIR_OS),)
+	$(if $(EXE_FILE),-@if exist $(basename $(EXE_FILE_OS)).tds $(RM) $(basename $(EXE_FILE_OS)).tds,)
+	$(if $(EXE_FILE),-@if not exist $(EXE_DIR_OS)\*.* $(RDP) $(EXE_DIR_OS),)
 
 endif
diff --git a/harbour/config/instsh.cf b/harbour/config/instsh.cf
index f1aefaad28..1034fefe3a 100644
--- a/harbour/config/instsh.cf
+++ b/harbour/config/instsh.cf
@@ -58,7 +58,7 @@ endif
 ifeq ($(HB_SHELL),os2)
 
 define inst_file_all
-if not exist $(INSTALL_DIR_OS) $(MD) $(INSTALL_DIR_OS)
+if not exist $(INSTALL_DIR_OS) $(MDP) $(INSTALL_DIR_OS)
 $(foreach file, $(INSTALL_FILES_OS), $(inst_file))
 
 endef
diff --git a/harbour/config/lib.cf b/harbour/config/lib.cf
index 02280b5849..7d0c733e9b 100644
--- a/harbour/config/lib.cf
+++ b/harbour/config/lib.cf
@@ -7,11 +7,6 @@ include $(TOP)$(ROOT)config/global.cf
 ifneq ($(HB_ARCHITECTURE),)
 ifneq ($(HB_COMPILER),)
 
-# no slash at the end
-LIB_ARCH_DIR := $(TOP)$(ROOT)lib/$(HB_ARCHITECTURE)
-# no slash at the end
-LIB_DIR := $(TOP)$(ROOT)lib/$(ARCH_COMP)
-
 include $(TOP)$(ROOT)config/c.cf
 include $(TOP)$(ROOT)config/prg.cf
 
@@ -19,11 +14,6 @@ LIB_NAME := $(LIB_PREF)$(LIBNAME)$(LIB_EXT)
 
 LIB_FILE := $(LIB_DIR)/$(LIB_NAME)
 
-ifeq ($(HB_SHELL),os2)
-   EXE_ARCH_DIR := $(TOP)$(ROOT)bin/$(HB_ARCHITECTURE)
-endif
-EXE_DIR := $(TOP)$(ROOT)bin/$(ARCH_COMP)
-
 ALL_OBJS = $(ALL_C_OBJS) $(ALL_PRG_OBJS)
 
 first:: dirbase descend
diff --git a/harbour/config/none.cf b/harbour/config/none.cf
index 579ffd8777..4e6ec57b42 100644
--- a/harbour/config/none.cf
+++ b/harbour/config/none.cf
@@ -8,7 +8,7 @@ ifneq ($(HB_ARCHITECTURE),)
 ifneq ($(HB_COMPILER),)
 
 ifneq ($(LIBNAME),)
-   DIR_RULE := @$(CMDPREF)echo "The '$(LIBNAME)' library ignored."
+   DIR_RULE := @echo "The '$(LIBNAME)' library ignored."
 else
    DIR_RULE :=
 endif
diff --git a/harbour/config/os2-rm.exe b/harbour/config/os2-rm.exe
new file mode 100644
index 0000000000..f98d0654d9
Binary files /dev/null and b/harbour/config/os2-rm.exe differ