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Running GNU Emacs 24.2.1 (i386-mingw-nt6.1.7601) on Windows 7, the shell command (M-x shell) always creates a DOS box with the home directory. I've seen in other questions/answers that the default behaviour is to start a shell in the directory of the file in the current buffer, for example, Setting default working directory/drive in Emacs shell on Windows

I'm running from a limited user account, but this has not affected any other functions so far. Googling produced lots of information on how to switch to alternative shells, but I want to keep the normal DOS box. I just want to be able to start in the directory of the file that I'm viewing.

So which options need to be reconfigured?

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This is most likely related to your configuration. Try starting Emacs without it (emacs -q) and see if the behavior is still the same. I guess that somewhere in your configuration the `default-directory' variable is set to either an invalid value or to your home directory. "M-: -> default-directory" will show you the current value.

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Ok, that was weird. Your hints were enough to verify that it was definitely something to do with the start-up. The default-directory was set to my home directory but not when I started with -q. The config had no mention of directory settings so I just commented out everything except the custom-set-variables, started uncommenting things step-by-step to find the problem. After uncommenting everything, the default-dir is still ok and I can 'M-x shell' to the correct directory. Perhaps there was some problem with hidden characters. Regardless, the problem is solved. Thanks for your help! – tiktok Dec 31 '12 at 9:30

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