diff --git a/meteor/client/lib/virtualbox.js b/meteor/client/lib/virtualbox.js
index 4368f5c72f..4d0cda78c6 100644
--- a/meteor/client/lib/virtualbox.js
+++ b/meteor/client/lib/virtualbox.js
@@ -4,9 +4,9 @@ var path = require('path');
 
 VirtualBox = {};
 
-VirtualBox.REQUIRED_VERSION = '4.3.12';
-VirtualBox.INCLUDED_VERSION = '4.3.12';
-VirtualBox.INSTALLER_FILENAME = 'virtualbox-4.3.12.pkg';
+VirtualBox.REQUIRED_VERSION = '4.3.14';
+VirtualBox.INCLUDED_VERSION = '4.3.14';
+VirtualBox.INSTALLER_FILENAME = 'virtualbox-4.3.14.pkg';
 
 // Info for the hostonly interface we add to the VM.
 VirtualBox.HOSTONLY_HOSTIP = '192.168.60.3';
@@ -25,6 +25,8 @@ VirtualBox.exec = function (command, callback) {
 VirtualBox.install = function (callback) {
   // -W waits for the process to close before finishing.
   exec('open -W ' + path.join(Util.getBinDir(), this.INSTALLER_FILENAME), function (error, stdout, stderr) {
+    console.log(stdout);
+    console.log(stderr);
     if (error) {
       callback(error);
       return;
diff --git a/meteor/server/lib/validations.js b/meteor/lib/validations.js
similarity index 100%
rename from meteor/server/lib/validations.js
rename to meteor/lib/validations.js
diff --git a/meteor/server/apps.js b/meteor/server/apps.js
index d12a1e20a6..af9383afa3 100755
--- a/meteor/server/apps.js
+++ b/meteor/server/apps.js
@@ -1,55 +1,10 @@
-Apps.restart = function (app, callback) {
-  if (app.docker && app.docker.Id) {
-    try {
-      Docker.restartContainerSync(app.docker.Id);
-    } catch (e) {
-      console.error(e);
-    }
-    var containerData = Docker.getContainerDataSync(app.docker.Id);
-    Fiber(function () {
-      Apps.update(app._id, {$set: {
-        status: 'READY',
-        docker: containerData
-      }});
-    }).run();
-    callback(null);
-    // Use dig to refresh the DNS
-    exec('/usr/bin/dig dig ' + app.name + '.kite @172.17.42.1 ', function() {});
-  } else {
-    callback(null);
-  }
+removeBindFolder = function (name, callback) {
+  exec(path.join(getBinDir(), 'boot2docker') + ' ssh "sudo rm -rf /var/lib/docker/binds/' + name + '"', function(err, stdout) {
+    callback(err, stdout);
+  });
 };
 
-Apps.logs = function (app) {
-  if (app.docker && app.docker.Id) {
-    var container = docker.getContainer(app.docker.Id);
-    container.logs({follow: false, stdout: true, stderr: true, timestamps: true, tail: 300}, function (err, response) {
-      if (err) { throw err; }
-      Fiber(function () {
-        Apps.update(app._id, {
-          $set: {
-            logs: []
-          }
-        });
-      }).run();
-      var logs = [];
-      response.setEncoding('utf8');
-      response.on('data', function (line) {
-        logs.push(convert.toHtml(line.slice(8)));
-        Fiber(function () {
-          Apps.update(app._id, {
-            $set: {
-              logs: logs
-            }
-          });
-        }).run();
-      });
-      response.on('end', function () {});
-    });
-  }
-};
-
-Apps.recover = function (callback) {
+recoverApps = function (callback) {
   var apps = Apps.find({}).fetch();
   _.each(apps, function (app) {
     // Update the app with the latest container info
@@ -62,7 +17,7 @@ Apps.recover = function (callback) {
         console.log('restarting: ' + app.name);
         console.log(app.docker.Id);
         Fiber(function () {
-          Apps.restart(app, function (err) {
+          restartApp(app, function (err) {
             if (err) { console.error(err); }
           });
         }).run();
@@ -74,8 +29,7 @@ Apps.recover = function (callback) {
 
 Meteor.methods({
   recoverApps: function () {
-    this.unblock();
-    return Meteor._wrapAsync(Apps.recover)();
+    return Meteor._wrapAsync(recoverApps)();
   },
   configVar: function (appId, configVars) {
     this.unblock();
@@ -94,38 +48,64 @@ Meteor.methods({
     if (!app) {
       throw new Meteor.Error(403, 'No app found with this ID');
     }
-    Apps.remove({_id: app._id});
+    deleteApp(app, function (err) {
+      if (err) { console.error(err); }
+      var appPath = path.join(KITE_PATH, app.name);
+      deleteFolder(appPath);
+      removeBindFolder(app.name, function () {
+        console.log('Deleted Kite ' + app.name + ' directory.');
+        Fiber(function () {
+          Apps.remove({_id: app._id});
+        }).run();
+      });
+    });
   },
   createApp: function (formData) {
-    this.unblock();
     var validationResult = formValidate(formData, FormSchema.formCreateApp);
     if (validationResult.errors) {
       throw new Meteor.Error(400, 'Validation Failed.', validationResult.errors);
     } else {
       var cleaned = validationResult.cleaned;
-      var appName = cleaned.name;
-      var appPath = path.join(KITE_PATH, appName);
+      var appObj = {
+        name: cleaned.name,
+        imageId: cleaned.imageId,
+        status: 'STARTING',
+        config: {}
+      };
+      var appId = Apps.insert(appObj);
+      var appPath = path.join(KITE_PATH, appObj.name);
       if (!fs.existsSync(appPath)) {
-        console.log('Created Kite ' + appName + ' directory.');
+        console.log('Created Kite ' + appObj.name + ' directory.');
         fs.mkdirSync(appPath, function (err) {
           if (err) { throw err; }
         });
       }
-      var appObj = {
-        name: appName,
-        imageId: cleaned.imageId,
-        status: 'STARTING',
-        config: {},
-        path: appPath
-      };
-      Apps.insert(appObj);
+      Apps.update(appId, {
+        $set: {
+          'config.APP_ID': appId,
+          path: appPath
+        }
+      });
+      var image = Images.findOne(appObj.imageId);
+      loadKiteVolumes(image.path, appObj.name);
+      var app = Apps.findOne(appId);
+      removeBindFolder(app.name, function (err) {
+        if (err) {
+          console.error(err);
+        }
+        Fiber(function () {
+          Meteor.call('runApp', app, function (err) {
+            if (err) { throw err; }
+          });
+        }).run();
+      });
     }
   },
   getAppLogs: function (appId) {
     this.unblock();
     var app = Apps.findOne(appId);
     if (app) {
-      Apps.logs(app, function (err) {
+      getAppLogs(app, function (err) {
         if (err) { throw err; }
       });
     }
@@ -137,13 +117,12 @@ Meteor.methods({
       Apps.update(app._id, {$set: {
         status: 'STARTING'
       }});
-      Apps.restart(app, function (err) {
+      restartApp(app, function (err) {
         if (err) { console.error(err); }
       });
     }
   },
   resolveWatchers: function () {
-    this.unblock();
     return Meteor._wrapAsync(resolveWatchers)();
   }
 });
diff --git a/meteor/server/docker.js b/meteor/server/docker.js
index 6978024245..d71b12688b 100755
--- a/meteor/server/docker.js
+++ b/meteor/server/docker.js
@@ -1,11 +1,16 @@
-Dockerode = Meteor.require('dockerode');
+Docker = Meteor.require('dockerode');
 
-var DOCKER_HOST='192.168.60.103';
-docker = new Dockerode({host: DOCKER_HOST, port: '2375'});
+var Convert = Meteor.require('ansi-to-html');
+var convert = new Convert();
 
-Docker = {};
+var DOCKER_HOST='192.168.59.103';
+docker = new Docker({host: '192.168.59.103', port: '2375'});
 
-Docker.removeContainer = function (containerId, callback) {
+hasDockerfile = function (directory) {
+  return fs.existsSync(path.join(directory, 'Dockerfile'));
+};
+
+removeContainer = function (containerId, callback) {
   var container = docker.getContainer(containerId);
   container.kill(function (err) {
     if (err) { callback(err); return; }
@@ -17,11 +22,28 @@ Docker.removeContainer = function (containerId, callback) {
   });
 };
 
-Docker.removeContainerSync = function (containerId) {
-  return Meteor._wrapAsync(Docker.removeContainer)(containerId);
+removeContainerSync = function (containerId) {
+  return Meteor._wrapAsync(removeContainer)(containerId);
 };
 
-Docker.getContainerData = function (containerId, callback) {
+deleteApp = function (app, callback) {
+  if (!app.docker) {
+    callback(null);
+    return;
+  }
+  try {
+    removeContainerSync(app.docker.Id);
+  } catch (e) {
+    console.error(e);
+  }
+  callback(null);
+};
+
+deleteAppSync = function (app) {
+  return Meteor._wrapAsync(deleteApp)(app);
+};
+
+getContainerData = function (containerId, callback) {
   var container = docker.getContainer(containerId);
   container.inspect(function (err, data) {
     if (err) {
@@ -37,11 +59,11 @@ Docker.getContainerData = function (containerId, callback) {
   });
 };
 
-Docker.getContainerDataSync = function (containerId) {
-  return Meteor._wrapAsync(Docker.getContainerData)(containerId);
+getContainerDataSync = function (containerId) {
+  return Meteor._wrapAsync(getContainerData)(containerId);
 };
 
-Docker.runContainer = function (app, image, callback) {
+runContainer = function (app, image, callback) {
   var envParam = [];
   _.each(_.keys(app.config), function (key) {
     var builtStr = key + '=' + app.config[key];
@@ -72,17 +94,17 @@ Docker.runContainer = function (app, image, callback) {
       if (err) { callback(err, null); return; }
       console.log('Started container: ' + container.id);
       // Use dig to refresh the DNS
-      exec('/usr/bin/dig dig ' + app.name + '.kite @172.17.42.1 ', function() {});
+      exec('/usr/bin/dig dig ' + app.name + '.dev @172.17.42.1 ', function() {});
       callback(null, container);
     });
   });
 };
 
-Docker.runContainerSync = function (app, image) {
-  return Meteor._wrapAsync(Docker.runContainer)(app, image);
+runContainerSync = function (app, image) {
+  return Meteor._wrapAsync(runContainer)(app, image);
 };
 
-Docker.restartContainer = function (containerId, callback) {
+restartContainer = function (containerId, callback) {
   var container = docker.getContainer(containerId);
   container.restart(function (err) {
     if (err) {
@@ -95,8 +117,83 @@ Docker.restartContainer = function (containerId, callback) {
   });
 };
 
-Docker.restartContainerSync = function (containerId) {
-  return Meteor._wrapAsync(Docker.restartContainer)(containerId);
+restartContainerSync = function (containerId) {
+  return Meteor._wrapAsync(restartContainer)(containerId);
+};
+
+var getFromImage = function (dockerfile) {
+  var patternString = "(FROM)(.*)";
+  var regex = new RegExp(patternString, "g");
+  var fromInstruction = dockerfile.match(regex);
+  if (fromInstruction && fromInstruction.length > 0) {
+    return fromInstruction[0].replace('FROM', '').trim();
+  } else {
+    return null;
+  }
+};
+
+restartApp = function (app, callback) {
+  if (app.docker && app.docker.Id) {
+    try {
+      restartContainerSync(app.docker.Id);
+    } catch (e) {
+      console.error(e);
+    }
+    var containerData = getContainerDataSync(app.docker.Id);
+    Fiber(function () {
+      Apps.update(app._id, {$set: {
+        status: 'READY',
+        docker: containerData
+      }});
+    }).run();
+    callback(null);
+    // Use dig to refresh the DNS
+    exec('/usr/bin/dig dig ' + app.name + '.dev @172.17.42.1 ', function() {});
+  } else {
+    callback(null);
+  }
+};
+
+getAppLogs = function (app) {
+  if (app.docker && app.docker.Id) {
+    var container = docker.getContainer(app.docker.Id);
+    container.logs({follow: false, stdout: true, stderr: true, timestamps: true, tail: 300}, function (err, response) {
+      if (err) { throw err; }
+      Fiber(function () {
+        Apps.update(app._id, {
+          $set: {
+            logs: []
+          }
+        });
+      }).run();
+      var logs = [];
+      response.setEncoding('utf8');
+      response.on('data', function (line) {
+        logs.push(convert.toHtml(line.slice(8)));
+        Fiber(function () {
+          Apps.update(app._id, {
+            $set: {
+              logs: logs
+            }
+          });
+        }).run();
+      });
+      response.on('end', function () {});
+    });
+  }
+};
+
+createTarFile = function (image, callback) {
+  var TAR_PATH = path.join(KITE_TAR_PATH, image._id + '.tar');
+  exec('tar czf ' + TAR_PATH + ' -C ' + image.path + ' .', function (err) {
+    if (err) { callback(err, null); return; }
+    console.log('Created tar file: ' + TAR_PATH);
+    callback(null, TAR_PATH);
+  });
+};
+
+createTarFileSync = function (image) {
+  return Meteor._wrapAsync(createTarFile)(image);
 };
 
 var convertVolumeObjToArray = function (obj) {
@@ -112,7 +209,7 @@ var convertVolumeObjToArray = function (obj) {
   return result;
 };
 
-Docker.getImageData = function (imageId, callback) {
+getImageData = function (imageId, callback) {
   var image = docker.getImage(imageId.toLowerCase());
   image.inspect(function (err, data) {
     if (err) {
@@ -127,11 +224,11 @@ Docker.getImageData = function (imageId, callback) {
   });
 };
 
-Docker.getImageDataSync = function (imageId) {
-  return Meteor._wrapAsync(Docker.getImageData)(imageId);
+getImageDataSync = function (imageId) {
+  return Meteor._wrapAsync(getImageData)(imageId);
 };
 
-Docker.removeImage = function (imageId, callback) {
+removeImage = function (imageId, callback) {
   var image = docker.getImage(imageId.toLowerCase());
   image.remove({force: true}, function (err) {
     if (err) { callback(err); return; }
@@ -140,14 +237,25 @@ Docker.removeImage = function (imageId, callback) {
   });
 };
 
-Docker.removeImageSync = function (imageId) {
-  return Meteor._wrapAsync(Docker.removeImage)(imageId);
+removeImageSync = function (imageId) {
+  return Meteor._wrapAsync(removeImage)(imageId);
 };
 
-Docker.removeBindFolder = function (name, callback) {
-  exec(path.join(Util.getBinDir(), 'boot2docker') + ' ssh "sudo rm -rf /var/lib/docker/binds/' + name + '"', function (err, stdout) {
-    callback(err, stdout);
-  });
+deleteImage = function (image, callback) {
+  if (!image.docker) {
+    callback(null, {});
+    return;
+  }
+  try {
+    removeImageSync(image.docker.Id);
+  } catch (e) {
+    console.error(e);
+  }
+  callback(null);
+};
+
+deleteImageSync = function (image) {
+  return Meteor._wrapAsync(deleteImage)(image);
 };
 
 var defaultContainerOptions = function () {
@@ -196,7 +304,7 @@ resolveDefaultImages = function () {
     image.inspect(function (err) {
       if (err) {
         if (err.reason === 'no such image') {
-          docker.loadImage(path.join(Util.getBinDir(), 'base-images.tar.gz'), {}, function (err) {
+          docker.loadImage(path.join(getBinDir(), 'base-images.tar.gz'), {}, function (err) {
             if (err) {
               innerCallback(err);
               return;
@@ -266,7 +374,7 @@ reloadDefaultContainers = function (callback) {
   async.until(function () {
     return ready;
   }, function (callback) {
-    docker.listContainers(function (err) {
+    docker.listContainers(function (err, containers) {
       if (!err) {
         ready = true;
       }
@@ -283,7 +391,7 @@ reloadDefaultContainers = function (callback) {
         return;
       }
       console.log('Loading new Kitematic default images.');
-      docker.loadImage(path.join(Util.getBinDir(), 'base-images.tar.gz'), {}, function (err) {
+      docker.loadImage(path.join(getBinDir(), 'base-images.tar.gz'), {}, function (err) {
         if (err) {
           callback(err);
           return;
@@ -392,18 +500,142 @@ killAndRemoveContainers = function (names, callback) {
   });
 };
 
+pullImageFromDockerfile = function (dockerfile, imageId, callback) {
+  var fromImage = getFromImage(dockerfile);
+  console.log('From image: ' + fromImage);
+  var installedImage = null;
+  try {
+    installedImage = getImageDataSync(fromImage);
+  } catch (e) {
+    console.error(e);
+  }
+  if (fromImage && !installedImage) {
+    Fiber(function () {
+      Images.update(imageId, {
+        $set: {
+          buildLogs: []
+        }
+      });
+    }).run();
+    var logs = [];
+    docker.pull(fromImage, function (err, response) {
+      if (err) { callback(err); return; }
+      response.setEncoding('utf8');
+      response.on('data', function (data) {
+        try {
+          var logData = JSON.parse(data);
+          var logDisplay = '';
+          if (logData.id) {
+            logDisplay += logData.id + ' | ';
+          }
+          logDisplay += logData.status;
+          if (logData.progressDetail && logData.progressDetail.current && logData.progressDetail.total) {
+            logDisplay += ' - ' + Math.round(logData.progressDetail.current / logData.progressDetail.total * 100) + '%';
+          }
+          logs.push(logDisplay);
+          Fiber(function () {
+            Images.update(imageId, {
+              $set: {
+                buildLogs: logs
+              }
+            });
+          }).run();
+        } catch (e) {
+          console.error(e);
+        }
+      });
+      response.on('end', function () {
+        console.log('Finished pulling image: ' + fromImage);
+        callback(null);
+      });
+    });
+  } else {
+    callback(null);
+  }
+};
+
+buildImage = function (image, callback) {
+  Fiber(function () {
+    var tarFilePath = createTarFileSync(image);
+    Images.update(image._id, {
+      $set: {
+        buildLogs: []
+      }
+    });
+    docker.buildImage(tarFilePath, {t: image._id.toLowerCase()}, function (err, response) {
+      if (err) { callback(err); }
+      console.log('Building Docker image...');
+      var logs = [];
+      response.setEncoding('utf8');
+      response.on('data', function (data) {
+        try {
+          var line = JSON.parse(data).stream;
+          logs.push(convert.toHtml(line));
+          Fiber(function () {
+            Images.update(image._id, {
+              $set: {
+                buildLogs: logs
+              }
+            });
+          }).run();
+        } catch (e) {
+          console.error(e);
+        }
+      });
+      response.on('end', function () {
+        console.log('Finished building Docker image.');
+        try {
+          fs.unlinkSync(tarFilePath);
+          console.log('Cleaned up tar file.');
+        } catch (e) {
+          console.error(e);
+        }
+        Fiber(function () {
+          var imageData = null;
+          try {
+            imageData = getImageDataSync(image._id);
+            Images.update(image._id, {
+              $set: {
+                docker: imageData,
+                status: 'READY'
+              }
+            });
+          } catch (e) {
+            console.log(e);
+            Images.update(image._id, {
+              $set: {
+                status: 'ERROR'
+              }
+            });
+          }
+          var oldImageId = null;
+          if (image.docker && image.docker.Id) {
+            oldImageId = image.docker.Id;
+          }
+          if (oldImageId && imageData && oldImageId !== imageData.Id) {
+            try {
+              removeImageSync(oldImageId);
+            } catch (e) {
+              console.error(e);
+            }
+          }
+        }).run();
+        callback(null);
+      });
+    });
+  }).run();
+};
+
 Meteor.methods({
   runApp: function (app) {
     this.unblock();
     var image = Images.findOne({_id: app.imageId});
-    // Delete old container if one already exists
     try {
-      Docker.removeContainerSync(app.name);
+      removeContainerSync(app.name);
     } catch (e) {}
     try {
-      var container = Docker.runContainerSync(app, image);
-      var containerData = Docker.getContainerDataSync(container.id);
-      // Set a delay for app to spin up
+      var container = runContainerSync(app, image);
+      var containerData = getContainerDataSync(container.id);
       Meteor.setTimeout(function () {
         Apps.update(app._id, {$set: {
           docker: containerData,
@@ -418,23 +650,18 @@ Meteor.methods({
     return DOCKER_HOST;
   },
   reloadDefaultContainers: function () {
-    this.unblock();
     return Meteor._wrapAsync(reloadDefaultContainers)();
   },
   checkDefaultImages: function () {
-    this.unblock();
     return Meteor._wrapAsync(checkDefaultImages)();
   },
   resolveDefaultImages: function () {
-    this.unblock();
     return Meteor._wrapAsync(resolveDefaultImages)();
   },
   checkDefaultContainers: function () {
-    this.unblock();
     return Meteor._wrapAsync(checkDefaultContainers)();
   },
   resolveDefaultContainers: function () {
-    this.unblock();
     return Meteor._wrapAsync(resolveDefaultContainers)();
   }
 });
diff --git a/script/versions.sh b/script/versions.sh
index e46149f22c..7cfc5c99c9 100644
--- a/script/versions.sh
+++ b/script/versions.sh
@@ -2,7 +2,7 @@ BASE_IMAGE_VERSION=0.0.2
 BASE_IMAGE_VERSION_FILE=base-images-$BASE_IMAGE_VERSION.tar.gz
 BASE_IMAGE_FILE=base-images.tar.gz
 
-VIRTUALBOX_FILE=virtualbox-4.3.12.pkg
+VIRTUALBOX_FILE=virtualbox-4.3.14.pkg
 
 BOOT2DOCKER_CLI_VERSION=1.2.0
 BOOT2DOCKER_CLI_VERSION_FILE=boot2docker-$BOOT2DOCKER_CLI_VERSION