diff --git a/lib-ajaxserver.php b/lib-ajaxserver.php
index a2e657a..db97b6e 100644
--- a/lib-ajaxserver.php
+++ b/lib-ajaxserver.php
@@ -216,11 +216,9 @@ function filedepot_displayFolderListing($id=0, $level=0, $folderprefix='', $rowi
 
   if (empty($folderprefix)) $folderprefix = 0;
 
-  $level++;
-  if ($level == 1) {
+  if ($level == 0) {
     $retval .= nexdocsrv_generateFileListing($id, $level, $folderprefix);
   }
-
   $sql = '';
   if (function_exists('filedepot_customReportFoldersSQL')) {
     $sql = trim(filedepot_customReportFoldersSQL($id, $reportmode));
@@ -247,16 +245,16 @@ function filedepot_displayFolderListing($id=0, $level=0, $folderprefix='', $rowi
       else {
         $formatted_foldernumber = "{$folderprefix}.{$i}";
       }
-      $subfolderlisting = nexdocsrv_generateFileListing($A['cid'], $level, $formatted_foldernumber);
+      $subfolderlisting = nexdocsrv_generateFileListing($A['cid'], $level+1, $formatted_foldernumber);
       $subfolder_count = db_result(db_query("SELECT count(cid) FROM {filedepot_categories} WHERE pid=%d", $A['cid']));
       if ($subfolder_count > 0) {
         // Show any sub-subfolders - calling this function again recursively
-        $subfolderlisting .= filedepot_displayFolderListing($A['cid'], $level, $formatted_foldernumber, $rowid);
+        $subfolderlisting .= filedepot_displayFolderListing($A['cid'], $level+1, $formatted_foldernumber, $rowid);
       }
-      $retval .= theme('filedepot_folderlisting', $A, $formatted_foldernumber, $level, $subfolderlisting, $maxfolderorder);
+      $retval .= theme('filedepot_folderlisting', $A, $formatted_foldernumber, $level+1, $subfolderlisting, $maxfolderorder);
       $i++;
     }
-    if (empty($output) AND $level == 1) {
+    if (empty($output) AND $level == 0) {
       $retval .= "<div id=\"subfolder{$GLOBALS['lastRenderedFiles'][0][0]}_rec{$GLOBALS['lastRenderedFiles'][0][1]}_bottom\">";
     }
   }
@@ -266,7 +264,7 @@ function filedepot_displayFolderListing($id=0, $level=0, $folderprefix='', $rowi
 
 
 
-function nexdocsrv_generateFileListing($cid, $level=1, $folderprefix='') {
+function nexdocsrv_generateFileListing($cid, $level=0, $folderprefix='') {
   $filedepot = filedepot_filedepot();
 
   $filedepot->selectedTopLevelFolder = $cid;