Since upgrading to 6.x-1.2 can't upload pdf

I want to insert an image so click button. Image Properties box opens. I click 'Browse Server'
File browser opens. I go to 'Upload' then 'Upload New File' and 'File Upload' dialogue box opens
When I try to upload pdf file I get
'File extension not allowed in this folder'.
I can upload jpg jpeg gif png txt but not pdf
My Drupal file upload setting include pdf
Any ideas