>I have a form with a number of containers each holding more containers. I have setup Drag and Drop within the form only, (not OLE) and it is working great. I have set flags for where an item can be dropped or not and that part works fine.
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>Now I am trying to set the mouse cursor/pointer to show where something can/cannot be dropped. I now realize that the item being dragged is what sets the icon but I can't figure out how I am supposed to know what container it is over so I can change the pointer. Anyone got any sample code or can point me to some?

You're better off working with OLE drag and drop, even if you're only using it within your application. You get a lot more control over the process. In particular, whenever you drag over something, both the drag source's OLEGiveFeedback and the drop target's OLEDragOver methods fire, giving you a chance to decide what to do.

Tamar