diff --git a/src/com/android/launcher2/CellLayout.java b/src/com/android/launcher2/CellLayout.java
index ad87fa6..54fdcc5 100644
--- a/src/com/android/launcher2/CellLayout.java
+++ b/src/com/android/launcher2/CellLayout.java
@@ -218,6 +218,7 @@
         });
         mCrosshairsAnimator.getAnimator().setInterpolator(mEaseOutInterpolator);
 
+        mDragCell[0] = mDragCell[1] = -1;
         for (int i = 0; i < mDragOutlines.length; i++) {
             mDragOutlines[i] = new Point(-1, -1);
         }
@@ -1171,13 +1172,13 @@
         result[1] = Math.max(0, result[1]); // Snap to top
     }
 
-    void visualizeDropLocation(
-            View v, Bitmap dragOutline, int originX, int originY, int spanX, int spanY) {
+    void visualizeDropLocation(View v, Bitmap dragOutline, int originX, int originY,
+            int spanX, int spanY, Point dragOffset, Rect dragRegion) {
 
         final int oldDragCellX = mDragCell[0];
         final int oldDragCellY = mDragCell[1];
         final int[] nearest = findNearestVacantArea(originX, originY, spanX, spanY, v, mDragCell);
-        if (v != null) {
+        if (v != null && dragOffset == null) {
             mDragCenter.set(originX + (v.getWidth() / 2), originY + (v.getHeight() / 2));
         } else {
             mDragCenter.set(originX, originY);
@@ -1198,7 +1199,7 @@
             int left = topLeft[0];
             int top = topLeft[1];
 
-            if (v != null) {
+            if (v != null && dragOffset == null) {
                 // When drawing the drag outline, it did not account for margin offsets
                 // added by the view's parent.
                 MarginLayoutParams lp = (MarginLayoutParams) v.getLayoutParams();
@@ -1213,11 +1214,19 @@
                 left += ((mCellWidth * spanX) + ((spanX - 1) * mWidthGap)
                         - dragOutline.getWidth()) / 2;
             } else {
-                // Center the drag outline in the cell
-                left += ((mCellWidth * spanX) + ((spanX - 1) * mWidthGap)
-                        - dragOutline.getWidth()) / 2;
-                top += ((mCellHeight * spanY) + ((spanY - 1) * mHeightGap)
-                        - dragOutline.getHeight()) / 2;
+                if (dragOffset != null && dragRegion != null) {
+                    // Center the drag region *horizontally* in the cell and apply a drag
+                    // outline offset
+                    left += dragOffset.x + ((mCellWidth * spanX) + ((spanX - 1) * mWidthGap)
+                             - dragRegion.width()) / 2;
+                    top += dragOffset.y;
+                } else {
+                    // Center the drag outline in the cell
+                    left += ((mCellWidth * spanX) + ((spanX - 1) * mWidthGap)
+                            - dragOutline.getWidth()) / 2;
+                    top += ((mCellHeight * spanY) + ((spanY - 1) * mHeightGap)
+                            - dragOutline.getHeight()) / 2;
+                }
             }
 
             final int oldIndex = mDragOutlineCurrent;
diff --git a/src/com/android/launcher2/DragController.java b/src/com/android/launcher2/DragController.java
index 82aa30f..ee054ab 100644
--- a/src/com/android/launcher2/DragController.java
+++ b/src/com/android/launcher2/DragController.java
@@ -16,10 +16,9 @@
 
 package com.android.launcher2;
 
-import android.appwidget.AppWidgetManager;
-import android.appwidget.AppWidgetProviderInfo;
 import android.content.Context;
 import android.graphics.Bitmap;
+import android.graphics.Point;
 import android.graphics.Rect;
 import android.graphics.RectF;
 import android.os.Handler;
@@ -187,7 +186,7 @@
         int dragLayerX = loc[0];
         int dragLayerY = loc[1];
 
-        startDrag(b, dragLayerX, dragLayerY, source, dragInfo, dragAction, dragRegion);
+        startDrag(b, dragLayerX, dragLayerY, source, dragInfo, dragAction, null, dragRegion);
         b.recycle();
 
         if (dragAction == DRAG_ACTION_MOVE) {
@@ -214,7 +213,7 @@
         int dragLayerX = loc[0];
         int dragLayerY = loc[1];
 
-        startDrag(bmp, dragLayerX, dragLayerY, source, dragInfo, dragAction, dragRegion);
+        startDrag(bmp, dragLayerX, dragLayerY, source, dragInfo, dragAction, null, dragRegion);
 
         if (dragAction == DRAG_ACTION_MOVE) {
             v.setVisibility(View.GONE);
@@ -235,7 +234,7 @@
      */
     public void startDrag(Bitmap b, int dragLayerX, int dragLayerY,
             DragSource source, Object dragInfo, int dragAction) {
-        startDrag(b, dragLayerX, dragLayerY, source, dragInfo, dragAction, null);
+        startDrag(b, dragLayerX, dragLayerY, source, dragInfo, dragAction, null, null);
     }
 
     /**
@@ -253,7 +252,7 @@
      *          Makes dragging feel more precise, e.g. you can clip out a transparent border
      */
     public void startDrag(Bitmap b, int dragLayerX, int dragLayerY,
-            DragSource source, Object dragInfo, int dragAction, Rect dragRegion) {
+            DragSource source, Object dragInfo, int dragAction, Point dragOffset, Rect dragRegion) {
         if (PROFILE_DRAWING_DURING_DRAG) {
             android.os.Debug.startMethodTracing("Launcher");
         }
@@ -290,6 +289,9 @@
         final DragView dragView = mDragObject.dragView = new DragView(mLauncher, b, registrationX,
                 registrationY, 0, 0, b.getWidth(), b.getHeight());
 
+        if (dragOffset != null) {
+            dragView.setDragVisualizeOffset(new Point(dragOffset));
+        }
         if (dragRegion != null) {
             dragView.setDragRegion(new Rect(dragRegion));
         }
diff --git a/src/com/android/launcher2/DragView.java b/src/com/android/launcher2/DragView.java
index 386cb55..dd94175 100644
--- a/src/com/android/launcher2/DragView.java
+++ b/src/com/android/launcher2/DragView.java
@@ -24,11 +24,9 @@
 import android.graphics.Canvas;
 import android.graphics.Matrix;
 import android.graphics.Paint;
+import android.graphics.Point;
 import android.graphics.Rect;
-import android.os.IBinder;
 import android.view.View;
-import android.view.WindowManager;
-import android.view.WindowManagerImpl;
 import android.view.animation.DecelerateInterpolator;
 
 import com.android.launcher.R;
@@ -39,6 +37,7 @@
     private int mRegistrationX;
     private int mRegistrationY;
 
+    private Point mDragVisualizeOffset = null;
     private Rect mDragRegion = null;
     private DragLayer mDragLayer = null;
     private boolean mHasDrawn = false;
@@ -135,6 +134,14 @@
         return mDragRegion.height();
     }
 
+    public void setDragVisualizeOffset(Point p) {
+        mDragVisualizeOffset = p;
+    }
+
+    public Point getDragVisualizeOffset() {
+        return mDragVisualizeOffset;
+    }
+
     public void setDragRegion(Rect r) {
         mDragRegion = r;
     }
diff --git a/src/com/android/launcher2/Workspace.java b/src/com/android/launcher2/Workspace.java
index d1f9617..e4f1fe8 100644
--- a/src/com/android/launcher2/Workspace.java
+++ b/src/com/android/launcher2/Workspace.java
@@ -17,12 +17,12 @@
 package com.android.launcher2;
 
 import android.animation.Animator;
+import android.animation.Animator.AnimatorListener;
 import android.animation.AnimatorListenerAdapter;
 import android.animation.AnimatorSet;
 import android.animation.ObjectAnimator;
 import android.animation.TimeInterpolator;
 import android.animation.ValueAnimator;
-import android.animation.Animator.AnimatorListener;
 import android.animation.ValueAnimator.AnimatorUpdateListener;
 import android.app.AlertDialog;
 import android.app.WallpaperManager;
@@ -40,6 +40,7 @@
 import android.graphics.Canvas;
 import android.graphics.Matrix;
 import android.graphics.Paint;
+import android.graphics.Point;
 import android.graphics.PorterDuff;
 import android.graphics.Rect;
 import android.graphics.RectF;
@@ -1784,7 +1785,7 @@
                 v.getWidth() + padding, v.getHeight() + padding, Bitmap.Config.ARGB_8888);
 
         canvas.setBitmap(b);
-        drawDragView(v, canvas, padding, false);
+        drawDragView(v, canvas, padding, true);
         mOutlineHelper.applyMediumExpensiveOutlineWithBlur(b, canvas, outlineColor, outlineColor);
         canvas.setBitmap(null);
         return b;
@@ -1866,6 +1867,8 @@
     }
 
     public void beginDragShared(View child, DragSource source) {
+        Resources r = getResources();
+
         // We need to add extra padding to the bitmap to make room for the glow effect
         final int bitmapPadding = HolographicOutlineHelper.MAX_OUTER_BLUR_RADIUS;
 
@@ -1878,17 +1881,22 @@
         final int dragLayerX = (int) mTempXY[0] + (child.getWidth() - bmpWidth) / 2;
         int dragLayerY = mTempXY[1] - bitmapPadding / 2;
 
+        Point dragVisualizeOffset = null;
         Rect dragRect = null;
-        if (child instanceof BubbleTextView) {
-            int iconSize = getResources().getDimensionPixelSize(R.dimen.app_icon_size);
+        if (child instanceof BubbleTextView || child instanceof PagedViewIcon) {
+            int iconSize = r.getDimensionPixelSize(R.dimen.app_icon_size);
+            int iconPaddingTop = r.getDimensionPixelSize(R.dimen.app_icon_padding_top);
             int top = child.getPaddingTop();
             int left = (bmpWidth - iconSize) / 2;
             int right = left + iconSize;
             int bottom = top + iconSize;
             dragLayerY += top;
+            // Note: The drag region is used to calculate drag layer offsets, but the
+            // dragVisualizeOffset in addition to the dragRect (the size) to position the outline.
+            dragVisualizeOffset = new Point(-bitmapPadding / 2, iconPaddingTop - bitmapPadding / 2);
             dragRect = new Rect(left, top, right, bottom);
         } else if (child instanceof FolderIcon) {
-            int previewSize = getResources().getDimensionPixelSize(R.dimen.folder_preview_size);
+            int previewSize = r.getDimensionPixelSize(R.dimen.folder_preview_size);
             dragRect = new Rect(0, 0, child.getWidth(), previewSize);
         }
 
@@ -1899,7 +1907,7 @@
         }
 
         mDragController.startDrag(b, dragLayerX, dragLayerY, source, child.getTag(),
-                DragController.DRAG_ACTION_MOVE, dragRect);
+                DragController.DRAG_ACTION_MOVE, dragVisualizeOffset, dragRect);
         b.recycle();
     }
 
@@ -2354,13 +2362,13 @@
             showOutlines();
             layout.setIsDragOccuring(true);
             layout.onDragEnter();
-            layout.visualizeDropLocation(null, mDragOutline, x, y, 1, 1);
+            layout.visualizeDropLocation(null, mDragOutline, x, y, 1, 1, null, null);
 
             return true;
         }
         case DragEvent.ACTION_DRAG_LOCATION:
             // Visualize the drop location
-            layout.visualizeDropLocation(null, mDragOutline, x, y, 1, 1);
+            layout.visualizeDropLocation(null, mDragOutline, x, y, 1, 1, null, null);
             return true;
         case DragEvent.ACTION_DROP: {
             // Try and add any shortcuts
@@ -2727,7 +2735,8 @@
             if (!mCreateUserFolderOnDrop && !isOverFolder) {
                 mDragTargetLayout.visualizeDropLocation(child, mDragOutline,
                         (int) mDragViewVisualCenter[0], (int) mDragViewVisualCenter[1],
-                        item.spanX, item.spanY);
+                        item.spanX, item.spanY, d.dragView.getDragVisualizeOffset(),
+                        d.dragView.getDragRegion());
             }
         }
     }