diff --git a/builder.py b/builder.py
index b655f35..63a6caa 100644
--- a/builder.py
+++ b/builder.py
@@ -107,7 +107,7 @@ class BuildJob:
                 sf.set_checked()
                 sf.save()
                 return self._after2(0)
-        if (os.path.exists(t) and not os.path.exists(t + '/.')
+        if (os.path.exists(t) and not os.path.isdir(t + '/.')
              and not sf.is_generated):
             # an existing source file that was not generated by us.
             # This step is mentioned by djb in his notes.
diff --git a/contrib/bash_completion.d/redo b/contrib/bash_completion.d/redo
index 46c3621..562ce01 100644
--- a/contrib/bash_completion.d/redo
+++ b/contrib/bash_completion.d/redo
@@ -23,7 +23,7 @@ __redo_completions()
 			rest=${name#$cur}
 			[ "$cur$rest" != "$name" ] && continue
 			name2="$cur${rest%%/*}"
-			[ -e "$name2/." ] || echo "$name2"
+			[ -d "$name2/." ] || echo "$name2"
 		done
 		
 		# targets named explicitly by .do files
diff --git a/minimal/do b/minimal/do
index 3c17ac8..5bde592 100755
--- a/minimal/do
+++ b/minimal/do
@@ -99,7 +99,7 @@ _do()
 {
 	DIR=$1
 	TARGET=$2
-	if [ ! -e "$TARGET" ] || [ -e "$TARGET/." -a ! -e "$TARGET.did" ]; then
+	if [ ! -e "$TARGET" ] || [ -d "$TARGET/." -a ! -e "$TARGET.did" ]; then
 		printf '%sdo  %s%s%s%s\n' \
 			"$GREEN" "$DO_DEPTH" "$BOLD" "$DIR$TARGET" "$PLAIN" >&2
 		echo "$PWD/$TARGET" >>"$DO_BUILT"
diff --git a/t/default.vartest.do b/t/default.vartest.do
new file mode 100644
index 0000000..9aa78cd
--- /dev/null
+++ b/t/default.vartest.do
@@ -0,0 +1,2 @@
+: ${PREFIX=not defined}
+echo "$PREFIX"
diff --git a/t/vartest.do b/t/vartest.do
new file mode 100644
index 0000000..2abd784
--- /dev/null
+++ b/t/vartest.do
@@ -0,0 +1,3 @@
+PREFIX=/a/b/c/d/e redo vartest2
+read x <vartest2
+[ "$x" = "/a/b/c/d/e" ] || exit 45