diff --git a/plugin/src/Reconciler.lua b/plugin/src/Reconciler.lua
index 03373e65..1a478ec8 100644
--- a/plugin/src/Reconciler.lua
+++ b/plugin/src/Reconciler.lua
@@ -1,5 +1,27 @@
 local Reconciler = {}
 
+local function isInit(item, itemFileName)
+	if item.type == "dir" then
+		return
+	end
+
+	return not not itemFileName:find("^init%.")
+end
+
+local function findInit(item)
+	if item.type ~= "dir" then
+		return nil, nil
+	end
+
+	for childFileName, childItem in pairs(item.children) do
+		if isInit(childItem, childFileName) then
+			return childItem, childFileName
+		end
+	end
+
+	return nil, nil
+end
+
 local function itemToName(item, fileName)
 	if item and item.type == "dir" then
 		return fileName, "Folder"
@@ -30,11 +52,19 @@ end
 
 function Reconciler._reifyShallow(item, fileName)
 	if item.type == "dir" then
-		-- TODO: handle init
-		local rbx = Instance.new("Folder")
-		rbx.Name = fileName
+		local initItem, initFileName = findInit(item)
 
-		return rbx
+		if initItem then
+			local rbx = Reconciler._reify(initItem, initFileName)
+			rbx.Name = fileName
+
+			return rbx
+		else
+			local rbx = Instance.new("Folder")
+			rbx.Name = fileName
+
+			return rbx
+		end
 	elseif item.type == "file" then
 		local objectName, className = itemToName(item, fileName)
 
@@ -49,22 +79,24 @@ function Reconciler._reifyShallow(item, fileName)
 	end
 end
 
-function Reconciler._reify(item, fileName)
+function Reconciler._reify(item, fileName, parent)
 	local rbx = Reconciler._reifyShallow(item, fileName)
 
 	if item.type == "dir" then
-		for childName, child in pairs(item.children) do
-			local childRbx = Reconciler._reify(child, childName)
-			childRbx.Parent = rbx
-
-			-- TODO: handle init
+		for childFileName, childItem in pairs(item.children) do
+			if not isInit(childItem, childFileName) then
+				local childRbx = Reconciler._reify(childItem, childFileName)
+				childRbx.Parent = rbx
+			end
 		end
 	end
 
+	rbx.Parent = parent
+
 	return rbx
 end
 
-function Reconciler.reconcile(rbx, item, fileName)
+function Reconciler.reconcile(rbx, item, fileName, parent)
 	-- Item was deleted!
 	if not item then
 		if rbx then
@@ -74,26 +106,38 @@ function Reconciler.reconcile(rbx, item, fileName)
 		return
 	end
 
-	-- Item was created!
-	if not rbx then
-		return Reconciler._reify(item, fileName)
-	end
-
 	if item.type == "dir" then
-		-- TODO: handle init
+		-- Folder was created!
+		if not rbx then
+			return Reconciler._reify(item, fileName, parent)
+		end
 
-		if rbx.ClassName ~= "Folder" then
-			return Reconciler._reify(item, fileName)
+		local initItem, initFileName = findInit(item)
+
+		if initItem then
+			local _, initClassName = itemToName(initItem, initFileName)
+
+			if rbx.ClassName == initClassName then
+				setValues(rbx, initItem, initFileName)
+			else
+				return Reconciler._reify(item, fileName, parent)
+			end
+		else
+			if rbx.ClassName ~= "Folder" then
+				return Reconciler._reify(item, fileName, parent)
+			end
 		end
 
 		local visitedChildren = {}
 
 		for childFileName, childItem in pairs(item.children) do
-			local childName = itemToName(childItem, childFileName)
+			if not isInit(childItem, childFileName) then
+				local childName = itemToName(childItem, childFileName)
 
-			visitedChildren[childName] = true
+				visitedChildren[childName] = true
 
-			Reconciler.reconcile(rbx:FindFirstChild(childName), childItem, childFileName)
+				Reconciler.reconcile(rbx:FindFirstChild(childName), childItem, childFileName, rbx)
+			end
 		end
 
 		for _, childRbx in ipairs(rbx:GetChildren()) do
@@ -105,10 +149,18 @@ function Reconciler.reconcile(rbx, item, fileName)
 
 		return rbx
 	elseif item.type == "file" then
+		if isInit(item, fileName) then
+			-- TODO: usurp parent
+		end
+
+		if not rbx then
+			return Reconciler._reify(item, fileName, parent)
+		end
+
 		local _, className = itemToName(item, fileName)
 
 		if rbx.ClassName ~= className then
-			return Reconciler._reify(item, fileName)
+			return Reconciler._reify(item, fileName, parent)
 		end
 
 		setValues(rbx, item, fileName)
@@ -139,7 +191,7 @@ function Reconciler.reconcileRoute(route, item)
 
 	local name = itemToName(item, fileName)
 	local rbx = location:FindFirstChild(name)
-	local newRbx = Reconciler.reconcile(rbx, item, fileName)
+	local newRbx = Reconciler.reconcile(rbx, item, fileName, location)
 
 	if newRbx ~= rbx then
 		if rbx then