diff --git a/Core/CategoryManager.lua b/Core/CategoryManager.lua
index e434ac4..38c0b86 100644
--- a/Core/CategoryManager.lua
+++ b/Core/CategoryManager.lua
@@ -52,13 +52,21 @@ end
 -- texturePattern: Match icon texture path
 -- itemID: Specific item IDs (table of IDs)
 
+-- Group constants
+local GROUP_MAIN = "Main"
+local GROUP_OTHER = "Other"
+local GROUP_CLASS = "Class"
+
 -- Default category definitions that replicate the existing hardcoded behavior
 local DEFAULT_CATEGORIES = {
     order = {
-        "Home", "BoE", "Weapon", "Armor", "Consumable", "Food", "Drink",
+        "BoE", "Weapon", "Armor", "Consumable", "Food", "Drink",
         "Trade Goods", "Reagent", "Recipe", "Quiver", "Container",
-        "Soul Bag", "Miscellaneous", "Quest", "Junk", "Class Items", "Keyring"
+        "Soul Bag", "Miscellaneous", "Quest", "Junk",
+        "Class Items", "Keyring",
+        "Home", "Tools", "Empty"
     },
+    itemOverrides = {},  -- flat map: [itemID] = categoryId
     definitions = {
         ["BoE"] = {
             name = "BoE",
@@ -70,6 +78,7 @@ local DEFAULT_CATEGORIES = {
             priority = 75,
             enabled = true,
             isBuiltIn = true,
+            group = GROUP_MAIN,
         },
         ["Weapon"] = {
             name = "Weapon",
@@ -81,6 +90,7 @@ local DEFAULT_CATEGORIES = {
             priority = 70,
             enabled = true,
             isBuiltIn = true,
+            group = GROUP_MAIN,
         },
         ["Armor"] = {
             name = "Armor",
@@ -92,6 +102,7 @@ local DEFAULT_CATEGORIES = {
             priority = 70,
             enabled = true,
             isBuiltIn = true,
+            group = GROUP_MAIN,
         },
         ["Consumable"] = {
             name = "Consumable",
@@ -103,6 +114,7 @@ local DEFAULT_CATEGORIES = {
             priority = 50,
             enabled = true,
             isBuiltIn = true,
+            group = GROUP_MAIN,
         },
         ["Food"] = {
             name = "Food",
@@ -115,6 +127,7 @@ local DEFAULT_CATEGORIES = {
             priority = 55,
             enabled = true,
             isBuiltIn = true,
+            group = GROUP_MAIN,
         },
         ["Drink"] = {
             name = "Drink",
@@ -127,6 +140,7 @@ local DEFAULT_CATEGORIES = {
             priority = 55,
             enabled = true,
             isBuiltIn = true,
+            group = GROUP_MAIN,
         },
         ["Trade Goods"] = {
             name = "Trade Goods",
@@ -138,6 +152,7 @@ local DEFAULT_CATEGORIES = {
             priority = 40,
             enabled = true,
             isBuiltIn = true,
+            group = GROUP_MAIN,
         },
         ["Reagent"] = {
             name = "Reagent",
@@ -149,6 +164,7 @@ local DEFAULT_CATEGORIES = {
             priority = 40,
             enabled = true,
             isBuiltIn = true,
+            group = GROUP_MAIN,
         },
         ["Recipe"] = {
             name = "Recipe",
@@ -160,6 +176,7 @@ local DEFAULT_CATEGORIES = {
             priority = 40,
             enabled = true,
             isBuiltIn = true,
+            group = GROUP_MAIN,
         },
         ["Quiver"] = {
             name = "Quiver",
@@ -171,6 +188,7 @@ local DEFAULT_CATEGORIES = {
             priority = 40,
             enabled = true,
             isBuiltIn = true,
+            group = GROUP_MAIN,
         },
         ["Container"] = {
             name = "Container",
@@ -182,6 +200,7 @@ local DEFAULT_CATEGORIES = {
             priority = 40,
             enabled = true,
             isBuiltIn = true,
+            group = GROUP_MAIN,
         },
         ["Soul Bag"] = {
             name = "Soul Bag",
@@ -193,6 +212,7 @@ local DEFAULT_CATEGORIES = {
             priority = 45,
             enabled = true,
             isBuiltIn = true,
+            group = GROUP_MAIN,
         },
         ["Miscellaneous"] = {
             name = "Miscellaneous",
@@ -203,6 +223,7 @@ local DEFAULT_CATEGORIES = {
             enabled = true,
             isBuiltIn = true,
             isFallback = true,
+            group = GROUP_MAIN,
         },
         ["Quest"] = {
             name = "Quest",
@@ -214,6 +235,7 @@ local DEFAULT_CATEGORIES = {
             priority = 80,
             enabled = true,
             isBuiltIn = true,
+            group = GROUP_MAIN,
         },
         ["Junk"] = {
             name = "Junk",
@@ -225,17 +247,20 @@ local DEFAULT_CATEGORIES = {
             priority = 85,
             enabled = true,
             isBuiltIn = true,
+            group = GROUP_MAIN,
         },
         ["Class Items"] = {
             name = "Class Items",
             icon = "Interface\\Icons\\INV_Misc_Ammo_Arrow_01",
             rules = {
-                { type = "itemType", value = "Projectile" }
+                { type = "itemType", value = "Projectile" },
+                { type = "isSoulShard", value = true }
             },
             matchMode = "any",
             priority = 90,
             enabled = true,
             isBuiltIn = true,
+            group = GROUP_CLASS,
         },
         ["Keyring"] = {
             name = "Keyring",
@@ -247,20 +272,56 @@ local DEFAULT_CATEGORIES = {
             priority = 40,
             enabled = true,
             isBuiltIn = true,
+            group = GROUP_CLASS,
         },
         ["Home"] = {
             name = "Home",
             icon = "Interface\\Icons\\INV_Misc_Rune_01",
+            rules = {
+                { type = "itemID", value = {6948} }
+            },
+            matchMode = "all",
+            priority = 100,
+            enabled = true,
+            isBuiltIn = true,
+            group = GROUP_OTHER,
+        },
+        ["Tools"] = {
+            name = "Tools",
+            icon = "Interface\\Icons\\Trade_BlackSmithing",
+            rules = {
+                { type = "isProfessionTool", value = true }
+            },
+            matchMode = "all",
+            priority = 60,
+            enabled = true,
+            isBuiltIn = true,
+            group = GROUP_OTHER,
+        },
+        ["Empty"] = {
+            name = "Empty",
+            icon = "Interface\\PaperDoll\\UI-PaperDoll-Slot-Bag",
             rules = {},
             matchMode = "all",
-            priority = 0,
+            priority = -10,
             enabled = true,
             isBuiltIn = true,
             hideControls = true,
+            isEmptyCategory = true,
+            group = GROUP_OTHER,
         },
     }
 }
 
+-- Group definitions for display order and built-in group mapping
+local GROUP_ORDER = { GROUP_MAIN, GROUP_CLASS, GROUP_OTHER }
+
+-- Map of built-in category IDs to their default groups (for migration)
+local BUILTIN_GROUP_MAP = {}
+for id, def in pairs(DEFAULT_CATEGORIES.definitions) do
+    BUILTIN_GROUP_MAP[id] = def.group
+end
+
 -- Deep copy a table
 local function deepCopy(orig)
     local copy
@@ -404,6 +465,130 @@ function CategoryManager:MigrateCategories()
             addon:Debug("CategoryManager: Migrated Junk category to use isJunk rule")
         end
     end
+
+    -- Migrate: Add group to all categories that lack it
+    for id, def in pairs(cats.definitions) do
+        if not def.group then
+            -- Use built-in mapping if available, otherwise default to Main
+            def.group = BUILTIN_GROUP_MAP[id] or GROUP_MAIN
+            addon:Debug("CategoryManager: Added group '%s' to category: %s", def.group, id)
+        end
+    end
+
+    -- Migrate: Convert per-category itemOverrides arrays to flat map at categories level
+    if not cats.itemOverrides then
+        cats.itemOverrides = {}
+    end
+    local migratedOverrides = false
+    for catId, def in pairs(cats.definitions) do
+        if def.itemOverrides and type(def.itemOverrides) == "table" then
+            -- Check if it's an array (old format) by looking for numeric keys
+            local isArray = false
+            for k, v in pairs(def.itemOverrides) do
+                if type(k) == "number" then
+                    isArray = true
+                    break
+                end
+            end
+            if isArray then
+                for _, itemID in ipairs(def.itemOverrides) do
+                    cats.itemOverrides[itemID] = catId
+                    migratedOverrides = true
+                end
+                def.itemOverrides = nil
+            end
+        end
+    end
+    if migratedOverrides then
+        addon:Debug("CategoryManager: Migrated per-category itemOverrides to flat map")
+    end
+
+    -- Migrate Home category: add rules and remove hideControls
+    local homeCat = cats.definitions["Home"]
+    if homeCat and homeCat.isBuiltIn then
+        -- Remove hideControls
+        if homeCat.hideControls then
+            homeCat.hideControls = nil
+            addon:Debug("CategoryManager: Removed hideControls from Home")
+        end
+        -- Add rules if empty
+        if not homeCat.rules or table.getn(homeCat.rules) == 0 then
+            homeCat.rules = { { type = "itemID", value = {6948} } }
+            homeCat.priority = 100
+            addon:Debug("CategoryManager: Added itemID rule to Home category")
+        end
+        -- Ensure group is Other
+        if homeCat.group ~= GROUP_OTHER then
+            homeCat.group = GROUP_OTHER
+        end
+    end
+
+    -- Migrate Class Items: add isSoulShard rule if missing
+    local classItemsCat = cats.definitions["Class Items"]
+    if classItemsCat and classItemsCat.isBuiltIn then
+        local hasSoulShard = false
+        if classItemsCat.rules then
+            for _, rule in ipairs(classItemsCat.rules) do
+                if rule.type == "isSoulShard" then
+                    hasSoulShard = true
+                    break
+                end
+            end
+        end
+        if not hasSoulShard then
+            if not classItemsCat.rules then classItemsCat.rules = {} end
+            table.insert(classItemsCat.rules, { type = "isSoulShard", value = true })
+            classItemsCat.matchMode = "any"
+            addon:Debug("CategoryManager: Added isSoulShard rule to Class Items")
+        end
+    end
+
+    -- Ensure new categories in the order list are in correct positions
+    -- Check if order needs rebuilding to include new group-based ordering
+    local hasTools, hasEmpty = false, false
+    for _, id in ipairs(cats.order) do
+        if id == "Tools" then hasTools = true end
+        if id == "Empty" then hasEmpty = true end
+    end
+
+    -- If Tools or Empty were just added by the built-in migration above,
+    -- they're already at end of order. Move them to the Other group area.
+    if hasTools or hasEmpty then
+        -- Rebuild order to respect groups: Other, Main, Class
+        local grouped = {}
+        for _, g in ipairs(GROUP_ORDER) do
+            grouped[g] = {}
+        end
+        grouped["_ungrouped"] = {}
+
+        for _, id in ipairs(cats.order) do
+            local def = cats.definitions[id]
+            if def then
+                local g = def.group or GROUP_MAIN
+                if grouped[g] then
+                    table.insert(grouped[g], id)
+                else
+                    table.insert(grouped["_ungrouped"], id)
+                end
+            end
+        end
+
+        -- Rebuild order
+        local newOrder = {}
+        for _, g in ipairs(GROUP_ORDER) do
+            if grouped[g] then
+                for _, id in ipairs(grouped[g]) do
+                    table.insert(newOrder, id)
+                end
+            end
+        end
+        for _, id in ipairs(grouped["_ungrouped"]) do
+            table.insert(newOrder, id)
+        end
+
+        cats.order = newOrder
+        addon:Debug("CategoryManager: Rebuilt category order for group ordering")
+    end
 end
 
 -- Get all categories
@@ -438,20 +623,50 @@ function CategoryManager:SaveCategories(categories)
 end
 
 -- Add a new custom category
+-- If categoryId is nil, auto-generates a unique ID like "Custom_<time>_<random>"
 function CategoryManager:AddCategory(categoryId, definition)
     local cats = self:GetCategories()
 
+    -- Auto-generate ID if not provided
+    if not categoryId then
+        categoryId = "Custom_" .. time() .. "_" .. math.random(1000, 9999)
+        -- Ensure unique
+        while cats.definitions[categoryId] do
+            categoryId = "Custom_" .. time() .. "_" .. math.random(1000, 9999)
+        end
+    end
+
     if cats.definitions[categoryId] then
         addon:Debug("CategoryManager: Category already exists: " .. categoryId)
         return false
     end
 
-    definition.isBuiltIn = false
+    definition.isBuiltIn = definition.isBuiltIn or false
+    if not definition.group then
+        definition.group = GROUP_MAIN
+    end
     cats.definitions[categoryId] = definition
-    table.insert(cats.order, categoryId)
+
+    -- Insert at end of the category's group in the order list
+    local insertPos = nil
+    local group = definition.group
+    -- Find last category in the same group
+    for i = table.getn(cats.order), 1, -1 do
+        local existDef = cats.definitions[cats.order[i]]
+        if existDef and existDef.group == group then
+            insertPos = i + 1
+            break
+        end
+    end
+    if insertPos then
+        -- Lua 5.0 table.insert with position
+        table.insert(cats.order, insertPos, categoryId)
+    else
+        table.insert(cats.order, categoryId)
+    end
 
     self:SaveCategories(cats)
-    return true
+    return true, categoryId
 end
 
 -- Update an existing category
@@ -499,32 +714,106 @@ function CategoryManager:DeleteCategory(categoryId)
     return true
 end
 
--- Move category up in order
-function CategoryManager:MoveCategoryUp(categoryId)
+-- Check if a category can move up within its group
+function CategoryManager:CanMoveUp(categoryId)
     local cats = self:GetCategories()
+    local def = cats.definitions[categoryId]
+    if not def or def.hideControls then return false end
 
     for i, id in ipairs(cats.order) do
-        if id == categoryId and i > 1 then
-            cats.order[i] = cats.order[i - 1]
-            cats.order[i - 1] = categoryId
-            self:SaveCategories(cats)
-            return true
+        if id == categoryId then
+            -- Find any previous non-hideControls category (can cross group boundaries)
+            for j = i - 1, 1, -1 do
+                local prevDef = cats.definitions[cats.order[j]]
+                if prevDef and not prevDef.hideControls then
+                    return true
+                end
+            end
+            return false -- very first movable category
         end
     end
     return false
 end
 
--- Move category down in order
+-- Check if a category can move down (crosses group boundaries)
+function CategoryManager:CanMoveDown(categoryId)
+    local cats = self:GetCategories()
+    local def = cats.definitions[categoryId]
+    if not def or def.hideControls then return false end
+
+    local count = table.getn(cats.order)
+    for i, id in ipairs(cats.order) do
+        if id == categoryId then
+            -- Find any next non-hideControls category (can cross group boundaries)
+            for j = i + 1, count do
+                local nextDef = cats.definitions[cats.order[j]]
+                if nextDef and not nextDef.hideControls then
+                    return true
+                end
+            end
+            return false -- very last movable category
+        end
+    end
+    return false
+end
+
+-- Move category up in order (crosses group boundaries, changes group when crossing)
+function CategoryManager:MoveCategoryUp(categoryId)
+    local cats = self:GetCategories()
+    local def = cats.definitions[categoryId]
+    if not def or def.hideControls then return false end
+
+    for i, id in ipairs(cats.order) do
+        if id == categoryId then
+            -- Find previous non-hideControls category
+            for j = i - 1, 1, -1 do
+                local prevDef = cats.definitions[cats.order[j]]
+                if prevDef and not prevDef.hideControls then
+                    -- Swap positions
+                    cats.order[i] = cats.order[j]
+                    cats.order[j] = categoryId
+                    -- If crossing into a different group, adopt that group
+                    local prevGroup = prevDef.group or GROUP_MAIN
+                    if (def.group or GROUP_MAIN) ~= prevGroup then
+                        def.group = prevGroup
+                    end
+                    self:SaveCategories(cats)
+                    return true
+                end
+            end
+            return false
+        end
+    end
+    return false
+end
+
+-- Move category down in order (crosses group boundaries, changes group when crossing)
 function CategoryManager:MoveCategoryDown(categoryId)
     local cats = self:GetCategories()
+    local def = cats.definitions[categoryId]
+    if not def or def.hideControls then return false end
+
     local count = table.getn(cats.order)
 
     for i, id in ipairs(cats.order) do
-        if id == categoryId and i < count then
-            cats.order[i] = cats.order[i + 1]
-            cats.order[i + 1] = categoryId
-            self:SaveCategories(cats)
-            return true
+        if id == categoryId then
+            -- Find next non-hideControls category
+            for j = i + 1, count do
+                local nextDef = cats.definitions[cats.order[j]]
+                if nextDef and not nextDef.hideControls then
+                    -- Swap positions
+                    cats.order[i] = cats.order[j]
+                    cats.order[j] = categoryId
+                    -- If crossing into a different group, adopt that group
+                    local nextGroup = nextDef.group or GROUP_MAIN
+                    if (def.group or GROUP_MAIN) ~= nextGroup then
+                        def.group = nextGroup
+                    end
+                    self:SaveCategories(cats)
+                    return true
+                end
+            end
+            return false
         end
     end
     return false
@@ -742,6 +1031,26 @@ function CategoryManager:CategorizeItem(itemData, bagID, slotID, isOtherChar)
     end
     cacheMisses = cacheMisses + 1
 
+    -- Check item overrides first (flat map: itemID -> categoryId)
+    if itemData and itemData.link then
+        local itemID = addon.Modules.Utils:ExtractItemID(itemData.link)
+        if itemID then
+            local cats = self:GetCategories()
+            if cats.itemOverrides then
+                local overrideCatId = cats.itemOverrides[itemID]
+                if overrideCatId then
+                    local overrideDef = cats.definitions[overrideCatId]
+                    if overrideDef and overrideDef.enabled then
+                        if cacheKey then
+                            categoryCache[cacheKey] = overrideCatId
+                        end
+                        return overrideCatId
+                    end
+                end
+            end
+        end
+    end
+
     local sortedCats = self:GetCategoriesByPriority()
 
     -- Debug: show white item categorization
@@ -791,6 +1100,243 @@ function CategoryManager:BuildCategoryList()
     return list
 end
 
+-------------------------------------------
+-- Group Management
+-------------------------------------------
+
+-- Get ordered list of unique groups from the category order
+function CategoryManager:GetGroups()
+    local cats = self:GetCategories()
+    local seen = {}
+    local groups = {}
+    for _, id in ipairs(cats.order) do
+        local def = cats.definitions[id]
+        if def then
+            local g = def.group or GROUP_MAIN
+            if not seen[g] then
+                seen[g] = true
+                table.insert(groups, g)
+            end
+        end
+    end
+    return groups
+end
+
+-- Get categories organized by group: { groupName => {catIds} }
+-- Also returns ungrouped list for any categories without a group
+function CategoryManager:GetCategoriesByGroup()
+    local cats = self:GetCategories()
+    local result = {}
+    local ungrouped = {}
+
+    for _, id in ipairs(cats.order) do
+        local def = cats.definitions[id]
+        if def then
+            local g = def.group
+            if g then
+                if not result[g] then result[g] = {} end
+                table.insert(result[g], id)
+            else
+                table.insert(ungrouped, id)
+            end
+        end
+    end
+
+    return result, ungrouped
+end
+
+-- Change a category's group
+function CategoryManager:SetCategoryGroup(categoryId, groupName)
+    local cats = self:GetCategories()
+    local def = cats.definitions[categoryId]
+    if not def then return false end
+
+    local oldGroup = def.group or GROUP_MAIN
+    if oldGroup == groupName then return true end
+
+    def.group = groupName
+
+    -- Remove from current position in order
+    local currentPos = nil
+    for i, id in ipairs(cats.order) do
+        if id == categoryId then
+            currentPos = i
+            break
+        end
+    end
+    if currentPos then
+        table.remove(cats.order, currentPos)
+    end
+
+    -- Insert at end of new group
+    local insertPos = nil
+    for i = table.getn(cats.order), 1, -1 do
+        local existDef = cats.definitions[cats.order[i]]
+        if existDef and (existDef.group or GROUP_MAIN) == groupName then
+            insertPos = i + 1
+            break
+        end
+    end
+    if insertPos then
+        table.insert(cats.order, insertPos, categoryId)
+    else
+        table.insert(cats.order, categoryId)
+    end
+
+    self:SaveCategories(cats)
+    return true
+end
+
+-- Get the group order (unique groups in display order)
+function CategoryManager:GetGroupOrder()
+    return self:GetGroups()
+end
+
+
+-- Get group constants
+function CategoryManager:GetGroupMain() return GROUP_MAIN end
+function CategoryManager:GetGroupOther() return GROUP_OTHER end
+function CategoryManager:GetGroupClass() return GROUP_CLASS end
+
+-------------------------------------------
+-- Item Override System
+-------------------------------------------
+
+-- Assign an item to a specific category by item ID
+-- Uses flat map at categories level: cats.itemOverrides[itemID] = categoryId
+function CategoryManager:AssignItemToCategory(itemID, categoryId)
+    if not itemID or not categoryId then return false end
+    local cats = self:GetCategories()
+    local def = cats.definitions[categoryId]
+    if not def then return false end
+
+    if not cats.itemOverrides then
+        cats.itemOverrides = {}
+    end
+
+    cats.itemOverrides[itemID] = categoryId
+    self:SaveCategories(cats)
+    self:ClearCache()
+    return true
+end
+
+-- Remove an item from a specific category's overrides
+function CategoryManager:RemoveItemFromCategory(itemID, categoryId)
+    if not itemID or not categoryId then return false end
+    local cats = self:GetCategories()
+    if not cats.itemOverrides then return false end
+
+    if cats.itemOverrides[itemID] == categoryId then
+        cats.itemOverrides[itemID] = nil
+        self:SaveCategories(cats)
+        self:ClearCache()
+        return true
+    end
+    return false
+end
+
+-- Remove an item override regardless of category
+function CategoryManager:RemoveItemOverride(itemID)
+    if not itemID then return end
+    local cats = self:GetCategories()
+    if cats.itemOverrides then
+        cats.itemOverrides[itemID] = nil
+    end
+end
+
+-------------------------------------------
+-- Equipment Set Category Sync
+-------------------------------------------
+
+-- Saved properties for equipment set categories that were user-edited
+-- Preserves user changes (enabled state, order position) when sets are deleted/recreated
+local savedEquipSetProps = {}
+
+-- Sync equipment set categories with current set data from EquipmentSets module
+function CategoryManager:SyncEquipmentSetCategories()
+    local equipSets = addon.Modules.EquipmentSets
+    if not equipSets then return end
+
+    local showEquipSets = addon.Modules.DB:GetSetting("showEquipSetCategories")
+    if showEquipSets == false then return end
+
+    local setNames = equipSets:GetAllSetNames()
+    if not setNames then return end
+
+    local cats = self:GetCategories()
+    local existingSetCats = {}
+
+    -- Find existing EquipSet categories
+    for id, def in pairs(cats.definitions) do
+        if string.find(id, "^EquipSet:") then
+            existingSetCats[id] = true
+        end
+    end
+
+    -- Create/update categories for current sets
+    for _, setName in ipairs(setNames) do
+        local catId = "EquipSet:" .. setName
+        if not cats.definitions[catId] then
+            -- Check for saved properties from a previously deleted set
+            local props = savedEquipSetProps[catId]
+            local defaultMark = "Interface\\AddOns\\Guda\\Assets\\equipment"
+            local newDef = {
+                name = setName,
+                icon = "Interface\\Icons\\INV_Chest_Chain_04",
+                rules = {},
+                matchMode = "all",
+                priority = 65,
+                enabled = props and props.enabled or true,
+                isBuiltIn = false,
+                isEquipSetCategory = true,
+                group = GROUP_MAIN,
+                categoryMark = props and props.categoryMark or defaultMark,
+            }
+            cats.definitions[catId] = newDef
+
+            -- Add to order
+            local insertPos = nil
+            for i = table.getn(cats.order), 1, -1 do
+                local existDef = cats.definitions[cats.order[i]]
+                if existDef and (existDef.group or GROUP_MAIN) == GROUP_MAIN then
+                    insertPos = i + 1
+                    break
+                end
+            end
+            if insertPos then
+                table.insert(cats.order, insertPos, catId)
+            else
+                table.insert(cats.order, catId)
+            end
+
+            addon:Debug("CategoryManager: Created equipment set category: " .. catId)
+        end
+        existingSetCats[catId] = nil -- Mark as still active
+    end
+
+    -- Remove categories for sets that no longer exist
+    for catId in pairs(existingSetCats) do
+        local def = cats.definitions[catId]
+        if def then
+            -- Save user-edited properties before deletion
+            savedEquipSetProps[catId] = {
+                enabled = def.enabled,
+                categoryMark = def.categoryMark,
+            }
+        end
+        cats.definitions[catId] = nil
+        for i, id in ipairs(cats.order) do
+            if id == catId then
+                table.remove(cats.order, i)
+                break
+            end
+        end
+        addon:Debug("CategoryManager: Removed equipment set category: " .. catId)
+    end
+
+    self:SaveCategories(cats)
+end
+
 -- Get available rule types for UI
 function CategoryManager:GetRuleTypes()
     return {
diff --git a/Core/Database.lua b/Core/Database.lua
index 6098fec..19414fe 100644
--- a/Core/Database.lua
+++ b/Core/Database.lua
@@ -36,8 +36,8 @@ function DB:Initialize()
 				bankBagColumns = 8,
 				bankColumns = 10,
 				sortMethod = "quality", -- quality, name, type
-				iconSize = 40,
-				iconSpacing = 0,
+				iconSize = 37,
+				iconSpacing = 3,
 				iconFontSize = 12,
 				showQualityBorderEquipment = true,
 				showQualityBorderOther = true,
@@ -98,10 +98,10 @@ function DB:Initialize()
 		Guda_CharDB.settings.bankColumns = 10
 	end
 	if not Guda_CharDB.settings.iconSize then
-		Guda_CharDB.settings.iconSize = 40
+		Guda_CharDB.settings.iconSize = 37
 	end
 	if not Guda_CharDB.settings.iconSpacing then
-		Guda_CharDB.settings.iconSpacing = 0
+		Guda_CharDB.settings.iconSpacing = 3
 	end
 	if not Guda_CharDB.settings.iconFontSize then
 		Guda_CharDB.settings.iconFontSize = 12
@@ -121,6 +121,15 @@ function DB:Initialize()
 	if Guda_CharDB.settings.markUnusableItems == nil then
 		Guda_CharDB.settings.markUnusableItems = true
 	end
+	if Guda_CharDB.settings.mergedGroups == nil then
+		Guda_CharDB.settings.mergedGroups = {}
+	end
+	if Guda_CharDB.settings.showEquipSetCategories == nil then
+		Guda_CharDB.settings.showEquipSetCategories = true
+	end
+	if Guda_CharDB.settings.markEquipmentSets == nil then
+		Guda_CharDB.settings.markEquipmentSets = true
+	end
 
 	-- Initialize CategoryManager for custom categories
 	if addon.Modules.CategoryManager then
diff --git a/Core/Init.lua b/Core/Init.lua
index d06061d..2cf79de 100644
--- a/Core/Init.lua
+++ b/Core/Init.lua
@@ -53,8 +53,8 @@ addon.Constants = {
     SAVE_INTERVAL = 1800, -- 30 minutes in seconds
 
     -- UI Constants
-    BUTTON_SIZE = 40,
-    BUTTON_SPACING = 0,
+    BUTTON_SIZE = 37,
+    BUTTON_SPACING = 3,
     BUTTONS_PER_ROW = 10,
     MIN_ICON_SIZE = 30,
     MAX_ICON_SIZE = 64,
diff --git a/Core/Main.lua b/Core/Main.lua
index 8cfa4a6..3b3ff38 100644
--- a/Core/Main.lua
+++ b/Core/Main.lua
@@ -27,6 +27,11 @@ function Main:Initialize()
         addon.Modules.MoneyTracker:Initialize()
 		addon.Modules.EquipmentScanner:Initialize()
 
+        -- Initialize equipment sets (Outfitter/ItemRack integration)
+        if addon.Modules.EquipmentSets then
+            addon.Modules.EquipmentSets:Initialize()
+        end
+
         -- Initialize UI
         addon:Print("Initializing UI...")
         addon.Modules.BagFrame:Initialize()
diff --git a/Data/EquipmentSets.lua b/Data/EquipmentSets.lua
new file mode 100644
index 0000000..ed2454e
--- /dev/null
+++ b/Data/EquipmentSets.lua
@@ -0,0 +1,280 @@
+-- Guda Equipment Sets Module
+-- Detects and tracks equipment sets from Outfitter and ItemRack addons
+-- Provides API for checking if items belong to equipment sets
+
+local addon = Guda
+
+local EquipmentSets = {}
+addon.Modules.EquipmentSets = EquipmentSets
+
+-- Internal state
+local setData = {}       -- { setName => { itemIDs = {[itemID] = true} } }
+local itemToSets = {}    -- { [itemID] => { setName1 = true, setName2 = true } }
+local initialized = false
+local outfitterReady = false
+local itemRackReady = false
+
+-------------------------------------------
+-- Public API
+-------------------------------------------
+
+-- Check if an item ID belongs to any equipment set
+function EquipmentSets:IsInSet(itemID)
+    if not itemID then return false end
+    return itemToSets[itemID] ~= nil
+end
+
+-- Get set names that contain a specific item ID
+-- Returns a table of set names or nil
+function EquipmentSets:GetSetNames(itemID)
+    if not itemID then return nil end
+    local sets = itemToSets[itemID]
+    if not sets then return nil end
+
+    local names = {}
+    for name in pairs(sets) do
+        table.insert(names, name)
+    end
+    if table.getn(names) == 0 then return nil end
+    return names
+end
+
+-- Get all known set names (sorted)
+function EquipmentSets:GetAllSetNames()
+    local names = {}
+    for name in pairs(setData) do
+        table.insert(names, name)
+    end
+    table.sort(names)
+    return names
+end
+
+-------------------------------------------
+-- Internal: Rebuild item-to-set index
+-------------------------------------------
+
+local function RebuildItemIndex()
+    itemToSets = {}
+    for setName, data in pairs(setData) do
+        if data.itemIDs then
+            for itemID in pairs(data.itemIDs) do
+                if not itemToSets[itemID] then
+                    itemToSets[itemID] = {}
+                end
+                itemToSets[itemID][setName] = true
+            end
+        end
+    end
+end
+
+-------------------------------------------
+-- Outfitter Integration
+-------------------------------------------
+
+local function ScanOutfitter()
+    -- Check if Outfitter is loaded and initialized
+    if not Outfitter_GetCategoryOrder then return false end
+
+    addon:Debug("EquipmentSets: Scanning Outfitter outfits...")
+
+    local categoryOrder = Outfitter_GetCategoryOrder()
+    if not categoryOrder then return false end
+
+    local scannedSets = 0
+    for _, catID in ipairs(categoryOrder) do
+        local outfits = nil
+        if Outfitter_GetOutfitsByCategoryID then
+            outfits = Outfitter_GetOutfitsByCategoryID(catID)
+        end
+        if outfits then
+            for _, outfit in ipairs(outfits) do
+                local setName = outfit.Name
+                if setName and outfit.Items then
+                    local itemIDs = {}
+                    for slotName, item in pairs(outfit.Items) do
+                        if item then
+                            local itemID = nil
+                            -- Outfitter stores item codes
+                            if item.Code then
+                                itemID = tonumber(item.Code)
+                            elseif item.ItemID then
+                                itemID = tonumber(item.ItemID)
+                            end
+                            if itemID and itemID > 0 then
+                                itemIDs[itemID] = true
+                            end
+                        end
+                    end
+
+                    setData[setName] = { itemIDs = itemIDs, source = "Outfitter" }
+                    scannedSets = scannedSets + 1
+                end
+            end
+        end
+    end
+
+    addon:Debug("EquipmentSets: Scanned %d Outfitter outfits", scannedSets)
+    return scannedSets > 0
+end
+
+local function HookOutfitterEvents()
+    if not Outfitter_RegisterOutfitEvent then return end
+
+    local events = { "ADD", "DELETE", "EDIT", "RENAME" }
+    for _, eventName in ipairs(events) do
+        local success, err = pcall(function()
+            Outfitter_RegisterOutfitEvent(eventName, function()
+                -- Rescan after a brief delay to let Outfitter finish its update
+                addon:Debug("EquipmentSets: Outfitter event '%s', rescanning...", eventName)
+                ScanOutfitter()
+                RebuildItemIndex()
+                -- Sync categories
+                if addon.Modules.CategoryManager then
+                    addon.Modules.CategoryManager:SyncEquipmentSetCategories()
+                end
+            end)
+        end)
+        if not success then
+            addon:Debug("EquipmentSets: Failed to hook Outfitter event '%s': %s", eventName, tostring(err))
+        end
+    end
+end
+
+-------------------------------------------
+-- ItemRack Integration
+-------------------------------------------
+
+local function ScanItemRack()
+    -- Check if ItemRack is loaded
+    if not ItemRackUser or not ItemRackUser.Sets then return false end
+
+    addon:Debug("EquipmentSets: Scanning ItemRack sets...")
+
+    local scannedSets = 0
+    for setName, setInfo in pairs(ItemRackUser.Sets) do
+        -- Skip internal sets (start with special chars)
+        if not string.find(setName, "^~") then
+            local itemIDs = {}
+            if setInfo.equip then
+                for slot, itemString in pairs(setInfo.equip) do
+                    -- ItemRack format: "itemID:enchant:suffix:unique"
+                    if type(itemString) == "string" then
+                        local _, _, idStr = string.find(itemString, "^(%d+)")
+                        local itemID = tonumber(idStr)
+                        if itemID and itemID > 0 then
+                            itemIDs[itemID] = true
+                        end
+                    elseif type(itemString) == "number" then
+                        if itemString > 0 then
+                            itemIDs[itemString] = true
+                        end
+                    end
+                end
+            end
+
+            setData[setName] = { itemIDs = itemIDs, source = "ItemRack" }
+            scannedSets = scannedSets + 1
+        end
+    end
+
+    addon:Debug("EquipmentSets: Scanned %d ItemRack sets", scannedSets)
+    return scannedSets > 0
+end
+
+-------------------------------------------
+-- Full Scan (all sources)
+-------------------------------------------
+
+local function FullScan()
+    setData = {}
+
+    local hasOutfitter = ScanOutfitter()
+    local hasItemRack = ScanItemRack()
+
+    RebuildItemIndex()
+
+    -- Sync equipment set categories
+    if addon.Modules.CategoryManager then
+        addon.Modules.CategoryManager:SyncEquipmentSetCategories()
+    end
+
+    if hasOutfitter or hasItemRack then
+        addon:Debug("EquipmentSets: Full scan complete, %d total sets", table.getn(EquipmentSets:GetAllSetNames()))
+    end
+end
+
+-------------------------------------------
+-- Initialization
+-------------------------------------------
+
+function EquipmentSets:Initialize()
+    if initialized then return end
+    initialized = true
+
+    -- Register for ADDON_LOADED to catch late-loading addons
+    addon.Modules.Events:Register("ADDON_LOADED", function(event, addonName)
+        if addonName == "Outfitter" then
+            -- Outfitter needs its INIT event before scanning
+            outfitterReady = true
+            addon:Debug("EquipmentSets: Outfitter loaded, waiting for INIT...")
+        elseif addonName == "ItemRack" then
+            itemRackReady = true
+            addon:Debug("EquipmentSets: ItemRack loaded, scanning...")
+            FullScan()
+        end
+    end, "EquipmentSets")
+
+    -- Register for PLAYER_ENTERING_WORLD to catch already-loaded addons
+    addon.Modules.Events:Register("PLAYER_ENTERING_WORLD", function()
+        -- Check if Outfitter is already loaded
+        if Outfitter_GetCategoryOrder or gOutfitter_Initialized then
+            outfitterReady = true
+            HookOutfitterEvents()
+            FullScan()
+        end
+
+        -- Check if ItemRack is already loaded
+        if ItemRackUser and ItemRackUser.Sets then
+            itemRackReady = true
+            FullScan()
+        end
+    end, "EquipmentSets")
+
+    -- Hook Outfitter's INIT event if available (fires after Outfitter finishes setup)
+    -- This uses a frame to check periodically since OUTFITTER_INIT is a custom event
+    local initCheckFrame = CreateFrame("Frame")
+    initCheckFrame.elapsed = 0
+    initCheckFrame.checks = 0
+    initCheckFrame:SetScript("OnUpdate", function()
+        this.elapsed = this.elapsed + arg1
+        if this.elapsed < 1 then return end
+        this.elapsed = 0
+        this.checks = this.checks + 1
+
+        -- Check if Outfitter became available
+        if not outfitterReady and (gOutfitter_Initialized or Outfitter_GetCategoryOrder) then
+            outfitterReady = true
+            HookOutfitterEvents()
+            FullScan()
+            this:Hide()
+            return
+        end
+
+        -- Stop checking after 30 seconds
+        if this.checks > 30 then
+            this:Hide()
+            -- Do a final scan anyway in case addons loaded without events
+            if Outfitter_GetCategoryOrder or (ItemRackUser and ItemRackUser.Sets) then
+                FullScan()
+            end
+        end
+    end)
+    initCheckFrame:Show()
+
+    addon:Debug("EquipmentSets: Module initialized")
+end
+
+-- Force a rescan of all equipment set sources
+function EquipmentSets:Rescan()
+    FullScan()
+end
diff --git a/Guda.toc b/Guda.toc
index 6099dc6..b3c8ed0 100644
--- a/Guda.toc
+++ b/Guda.toc
@@ -24,6 +24,7 @@ Data\BankScanner.lua
 Data\MailboxScanner.lua
 Data\MoneyTracker.lua
 Data\EquipmentScanner.lua
+Data\EquipmentSets.lua
 
 Sorting\SortEngine.lua
 
diff --git a/UI/BagFrame.lua b/UI/BagFrame.lua
index bf67dc3..d27a029 100644
--- a/UI/BagFrame.lua
+++ b/UI/BagFrame.lua
@@ -996,55 +996,131 @@ function BagFrame:DisplayItemsByCategory(bagData, isOtherChar, charName)
     local categoryItemsProcessed = 0
     local CATEGORY_ITEMS_PER_BUDGET_CHECK = 8
 
-    local totalButtonsCreated = 0
-    for _, catName in ipairs(categoryList) do
-        local items = categories[catName]
-        local numItems = items and table.getn(items) or 0
-        if numItems > 0 then
-            addon:DebugCategory("  Category '%s': %d items, pos=(%d,%d)", catName, numItems, currentX, currentY)
-            -- Sort items using centralized sorter
-            Guda_SortCategoryItems(items)
+    -- Check merged groups setting
+    local mergedGroups = addon.Modules.DB:GetSetting("mergedGroups") or {}
 
-            local blockCols = numItems
-            if blockCols > perRow then blockCols = perRow end
-            local blockRows = math.ceil(numItems / perRow)
-            local blockWidth = blockCols * (buttonSize + spacing)
-            local blockHeight = 20 + (blockRows * (buttonSize + spacing)) + 5
+    -- Build category order index map for sorting within merged groups
+    local catOrderIndex = {}
+    for idx, catId in ipairs(categoryList) do
+        catOrderIndex[catId] = idx
+    end
 
-            -- Check if it fits in current row
-            if currentX > 0 and currentX + blockWidth + 20 > totalWidth + 5 then
-                currentX = 0
-                currentY = currentY + rowMaxHeight
-                rowMaxHeight = 0
-                addon:DebugCategory("    -> wrap to new row, Y=%d", currentY)
-            end
+    -- Build merged group display lists if any groups are merged
+    local mergedDisplayList = {}  -- { { name, items, icon, catDef } }
+    local processedCats = {}     -- Track which categories were merged
 
-            -- Add Header
-            local header = self:GetSectionHeader(headerIdx)
-            headerIdx = headerIdx + 1
-            header:SetPoint("TOPLEFT", itemContainer, "TOPLEFT", startX + currentX, startY - currentY)
-            header:SetWidth(blockWidth)
-
-            -- Get display name from category definition
-            local displayName = catName
-            if addon.Modules.CategoryManager then
-                local catDef = addon.Modules.CategoryManager:GetCategory(catName)
-                if catDef and catDef.name then
-                    displayName = catDef.name
+    if addon.Modules.CategoryManager then
+        local groupsByName = addon.Modules.CategoryManager:GetCategoriesByGroup()
+        for groupName, catIds in pairs(groupsByName) do
+            if mergedGroups[groupName] then
+                -- Merge all items from categories in this group into one section
+                local mergedItems = {}
+                local mergedName = groupName
+                local mergedIcon = nil
+                for _, catId in ipairs(catIds) do
+                    local items = categories[catId]
+                    if items then
+                        local orderIdx = catOrderIndex[catId] or 999
+                        for _, item in ipairs(items) do
+                            item.categoryOrderIndex = orderIdx
+                            table.insert(mergedItems, item)
+                        end
+                    end
+                    processedCats[catId] = true
+                end
+                if table.getn(mergedItems) > 0 then
+                    table.insert(mergedDisplayList, {
+                        name = mergedName,
+                        items = mergedItems,
+                        icon = nil, -- Group header, no single icon
+                    })
                 end
             end
-            header.fullName = displayName
-            header.isShortened = false
-            if string.len(displayName) > 8 and numItems < 2 then
-                displayName = string.sub(displayName, 1, 6) .. "..."
-                header.isShortened = true
-            end
-            header.text:SetText(displayName)
-            header:Show()
+        end
+    end
 
-            local itemY = currentY + 20
-            local col = 0
-            local row = 0
+    -- Track total buttons created across all category blocks
+    local totalButtonsCreated = 0
+
+    -- Helper to render a category block
+    local function RenderCategoryBlock(catName, items, numItems, catDef, isEmptyCat)
+        addon:DebugCategory("  Category '%s': %d items, pos=(%d,%d)", catName, numItems, currentX, currentY)
+        Guda_SortCategoryItems(items)
+
+        local effectiveItems = numItems
+        if isEmptyCat then effectiveItems = 1 end
+
+        local blockCols = effectiveItems
+        if blockCols > perRow then blockCols = perRow end
+        local blockRows = math.ceil(effectiveItems / perRow)
+        local blockWidth = blockCols * (buttonSize + spacing)
+        local blockHeight = 20 + (blockRows * (buttonSize + spacing)) + 5
+
+        -- Check if it fits in current row
+        if currentX > 0 and currentX + blockWidth + 20 > totalWidth + 5 then
+            currentX = 0
+            currentY = currentY + rowMaxHeight
+            rowMaxHeight = 0
+        end
+
+        -- Add Header
+        local header = self:GetSectionHeader(headerIdx)
+        headerIdx = headerIdx + 1
+        header:SetPoint("TOPLEFT", itemContainer, "TOPLEFT", startX + currentX, startY - currentY)
+        header:SetWidth(blockWidth)
+
+        -- Get display name from category definition
+        local displayName = catName
+        if catDef and catDef.name then
+            displayName = catDef.name
+        end
+
+        -- Set item count
+        if header.countText then
+            if numItems > 0 then
+                header.countText:SetText("(" .. numItems .. ")")
+                header.countText:Show()
+            else
+                header.countText:Hide()
+            end
+        end
+
+        header.fullName = displayName
+        header.isShortened = false
+        if string.len(displayName) > 8 and effectiveItems < 2 then
+            displayName = string.sub(displayName, 1, 6) .. "..."
+            header.isShortened = true
+        end
+        header.text:SetText(displayName)
+        header:Show()
+
+        local itemY = currentY + 20
+        local col = 0
+        local row = 0
+
+        if isEmptyCat then
+            -- Render empty slot indicator
+            local bagID = firstFreeBag or 0
+            local slotID = firstFreeSlot or 1
+            local bagParent = self:GetBagParent(bagID)
+            local button = Guda_GetItemButton(bagParent)
+            button:SetParent(bagParent)
+            button:SetWidth(buttonSize)
+            button:SetHeight(buttonSize)
+            button:ClearAllPoints()
+            button:SetPoint("TOPLEFT", itemContainer, "TOPLEFT", startX + currentX, startY - itemY)
+            button:Show()
+
+            local emptyItemData = {
+                texture = "Interface\\PaperDoll\\UI-PaperDoll-Slot-Bag",
+                count = totalFreeSlots,
+                name = "Empty Slots"
+            }
+            Guda_ItemButton_SetItem(button, bagID, slotID, emptyItemData, false, isOtherChar and charName or nil, true, true)
+            button.isReadOnly = false
+            button.inUse = true
+            table.insert(itemButtons, button)
+        else
             for _, item in ipairs(items) do
                 local bagID = item.bagID
                 local slot = item.slotID
@@ -1064,7 +1140,6 @@ function BagFrame:DisplayItemsByCategory(bagData, isOtherChar, charName)
                 Guda_ItemButton_SetItem(button, bagID, slot, itemData, false, isOtherChar and charName or nil, matchesFilter, isOtherChar)
                 button.inUse = true
                 table.insert(itemButtons, button)
-                -- Populate slot lookup for O(1) access
                 if not slotToButton[bagID] then slotToButton[bagID] = {} end
                 slotToButton[bagID][slot] = button
 
@@ -1074,7 +1149,6 @@ function BagFrame:DisplayItemsByCategory(bagData, isOtherChar, charName)
                     row = row + 1
                 end
 
-                -- Frame budget check
                 categoryItemsProcessed = categoryItemsProcessed + 1
                 if categoryItemsProcessed >= CATEGORY_ITEMS_PER_BUDGET_CHECK then
                     categoryItemsProcessed = 0
@@ -1083,25 +1157,50 @@ function BagFrame:DisplayItemsByCategory(bagData, isOtherChar, charName)
                     end
                 end
             end
+        end
 
-            totalButtonsCreated = totalButtonsCreated + numItems
-            if blockHeight > rowMaxHeight then rowMaxHeight = blockHeight end
-            currentX = currentX + blockWidth + 20
+        totalButtonsCreated = totalButtonsCreated + effectiveItems
+        if blockHeight > rowMaxHeight then rowMaxHeight = blockHeight end
+        currentX = currentX + blockWidth + 20
+    end
+
+    -- Render merged group sections first
+    for _, merged in ipairs(mergedDisplayList) do
+        local numItems = table.getn(merged.items)
+        if numItems > 0 then
+            RenderCategoryBlock(merged.name, merged.items, numItems, { name = merged.name, icon = merged.icon })
+        end
+    end
+
+    -- Render individual categories (skip merged ones and Empty)
+    for _, catName in ipairs(categoryList) do
+        if not processedCats[catName] then
+            local catDef = addon.Modules.CategoryManager and addon.Modules.CategoryManager:GetCategory(catName) or nil
+
+            -- Handle Empty category specially
+            if catDef and catDef.isEmptyCategory then
+                if totalFreeSlots > 0 and catDef.enabled then
+                    RenderCategoryBlock(catName, {}, 0, catDef, true)
+                end
+            else
+                local items = categories[catName]
+                local numItems = items and table.getn(items) or 0
+                if numItems > 0 then
+                    RenderCategoryBlock(catName, items, numItems, catDef, false)
+                end
+            end
         end
     end
     addon:DebugCategory("DisplayItemsByCategory: totalButtonsCreated=%d from categories", totalButtonsCreated)
 
     -- Update Y for bottom sections
     local y = currentY + rowMaxHeight
-    
-    -- Special sections at bottom (Hearthstone, Mount, Tools, Empty)
+
+    -- Special sections at bottom (only Mounts now)
     local bottomSections = {
-        { name = "Home", items = specialItems.Hearthstone },
         { name = "Mounts", items = specialItems.Mount },
-        { name = "Tools", items = specialItems.Tools },
-        { name = "Empty", items = {} }
     }
-    
+
     local x = startX
     y = startY - y
 
@@ -1112,10 +1211,6 @@ function BagFrame:DisplayItemsByCategory(bagData, isOtherChar, charName)
             break
         end
     end
-    -- Also check if Empty section should show
-    if totalFreeSlots > 0 then
-        hasAnyBottom = true
-    end
 
     if hasAnyBottom then
         y = y - 10
@@ -1125,22 +1220,7 @@ function BagFrame:DisplayItemsByCategory(bagData, isOtherChar, charName)
         for _, sec in ipairs(bottomSections) do
             local items = sec.items
             local numItems = table.getn(items)
-            if sec.name == "Empty" then
-                numItems = (totalFreeSlots > 0) and 1 or 0
-            end
             if numItems > 0 then
-                if sec.name == "Tools" then
-                    table.sort(items, function(a, b)
-                        -- Guard against nil entries
-                        if not a or not a.itemData then return false end
-                        if not b or not b.itemData then return true end
-                        if (a.itemData.quality or 0) ~= (b.itemData.quality or 0) then
-                            return (a.itemData.quality or 0) > (b.itemData.quality or 0)
-                        end
-                        return (a.itemData.name or "") < (b.itemData.name or "")
-                    end)
-                end
-
                 local blockCols = numItems
                 if blockCols > perRow then blockCols = perRow end
                 local blockRows = math.ceil(numItems / perRow)
@@ -1158,61 +1238,38 @@ function BagFrame:DisplayItemsByCategory(bagData, isOtherChar, charName)
                 header:SetPoint("TOPLEFT", itemContainer, "TOPLEFT", x + currentBottomX, y)
                 header:SetWidth(blockWidth)
                 header.text:SetText(sec.name)
+                if header.countText then header.countText:SetText("(" .. numItems .. ")"); header.countText:Show() end
                 header:Show()
 
                 local itemY = y - 20
                 local sCol = 0
                 local sRow = 0
-                
-                if sec.name == "Empty" then
-                    local bagID = firstFreeBag or 0
-                    local slotID = firstFreeSlot or 1
-                    local bagParent = self:GetBagParent(bagID)
+
+                for _, item in ipairs(items) do
+                    local bagParent = self:GetBagParent(item.bagID)
                     local button = Guda_GetItemButton(bagParent)
                     button:SetParent(bagParent)
                     button:SetWidth(buttonSize)
                     button:SetHeight(buttonSize)
                     button:ClearAllPoints()
-                    button:SetPoint("TOPLEFT", itemContainer, "TOPLEFT", x + currentBottomX, itemY)
+                    button:SetPoint("TOPLEFT", itemContainer, "TOPLEFT", x + currentBottomX + (sCol * (buttonSize + spacing)), itemY - (sRow * (buttonSize + spacing)))
                     button:Show()
-                    
-                    local emptyItemData = { 
-                        texture = "Interface\\PaperDoll\\UI-PaperDoll-Slot-Bag", 
-                        count = totalFreeSlots, 
-                        name = "Empty Slots" 
-                    }
-                    Guda_ItemButton_SetItem(button, bagID, slotID, emptyItemData, false, isOtherChar and charName or nil, true, true)
-                    button.isReadOnly = false
+                    Guda_ItemButton_SetItem(button, item.bagID, item.slotID, item.itemData, false, isOtherChar and charName or nil, self:PassesSearchFilter(item.itemData), isOtherChar)
                     button.inUse = true
                     table.insert(itemButtons, button)
-                else
-                    for _, item in ipairs(items) do
-                        local bagParent = self:GetBagParent(item.bagID)
-                        local button = Guda_GetItemButton(bagParent)
-                        button:SetParent(bagParent)
-                        button:SetWidth(buttonSize)
-                        button:SetHeight(buttonSize)
-                        button:ClearAllPoints()
-                        button:SetPoint("TOPLEFT", itemContainer, "TOPLEFT", x + currentBottomX + (sCol * (buttonSize + spacing)), itemY - (sRow * (buttonSize + spacing)))
-                        button:Show()
-                        Guda_ItemButton_SetItem(button, item.bagID, item.slotID, item.itemData, false, isOtherChar and charName or nil, self:PassesSearchFilter(item.itemData), isOtherChar)
-                        button.inUse = true
-                        table.insert(itemButtons, button)
-                        -- Populate slot lookup for O(1) access
-                        if not slotToButton[item.bagID] then slotToButton[item.bagID] = {} end
-                        slotToButton[item.bagID][item.slotID] = button
+                    if not slotToButton[item.bagID] then slotToButton[item.bagID] = {} end
+                    slotToButton[item.bagID][item.slotID] = button
 
-                        sCol = sCol + 1
-                        if sCol >= blockCols then
-                            sCol = 0
-                            sRow = sRow + 1
-                        end
+                    sCol = sCol + 1
+                    if sCol >= blockCols then
+                        sCol = 0
+                        sRow = sRow + 1
                     end
                 end
 
                 if blockHeight > sectionMaxHeight then sectionMaxHeight = blockHeight end
                 currentBottomX = currentBottomX + blockWidth + 20
-                
+
                 if currentBottomX >= totalWidth then
                     currentBottomX = 0
                     y = y - sectionMaxHeight - 5
@@ -1220,7 +1277,7 @@ function BagFrame:DisplayItemsByCategory(bagData, isOtherChar, charName)
                 end
             end
         end
-        
+
         if currentBottomX > 0 then
             y = y - sectionMaxHeight
         end
diff --git a/UI/BankFrame.lua b/UI/BankFrame.lua
index 3e49ef4..ef38de2 100644
--- a/UI/BankFrame.lua
+++ b/UI/BankFrame.lua
@@ -779,6 +779,13 @@ function BankFrame:DisplayItemsByCategory(bankData, isOtherChar, charName)
     local CATEGORY_ITEMS_PER_BUDGET_CHECK = 8
 
     for _, catName in ipairs(categoryList) do
+        local catDef = addon.Modules.CategoryManager and addon.Modules.CategoryManager:GetCategory(catName) or nil
+
+        -- Skip Empty category in bank (bank doesn't need empty slot indicator in category loop)
+        if catDef and catDef.isEmptyCategory then
+            -- Skip empty categories in bank view
+        else
+
         local items = categories[catName]
         local numItems = items and table.getn(items) or 0
         if numItems > 0 then
@@ -803,9 +810,19 @@ function BankFrame:DisplayItemsByCategory(bankData, isOtherChar, charName)
             headerIdx = headerIdx + 1
             header:SetPoint("TOPLEFT", itemContainer, "TOPLEFT", startX + currentX, startY - currentY)
             header:SetWidth(blockWidth)
-            
+
             local displayName = catName
-            header.fullName = catName
+            if catDef and catDef.name then
+                displayName = catDef.name
+            end
+
+            -- Set item count
+            if header.countText then
+                header.countText:SetText("(" .. numItems .. ")")
+                header.countText:Show()
+            end
+
+            header.fullName = displayName
             header.isShortened = false
             if string.len(displayName) > 10 and numItems < 2 then
                 displayName = string.sub(displayName, 1, 7) .. "..."
@@ -865,22 +882,20 @@ function BankFrame:DisplayItemsByCategory(bankData, isOtherChar, charName)
             if blockHeight > rowMaxHeight then rowMaxHeight = blockHeight end
             currentX = currentX + blockWidth + 20
         end
+        end -- isEmptyCategory else
     end
 
     -- Update Y for bottom sections
     local y = currentY + rowMaxHeight
-    
-    -- Special sections at bottom (Hearthstone, Mount, Tools, Empty)
+
+    -- Special sections at bottom (only Mounts now; Home/Tools/Empty are real categories)
     local bottomSections = {
-        { name = "Home", items = specialItems.Hearthstone },
         { name = "Mounts", items = specialItems.Mount },
-        { name = "Tools", items = specialItems.Tools },
-        { name = "Empty", items = {} }
     }
-    
+
     local x = startX
     y = startY - y
-    
+
     local hasAnyBottom = false
     for _, sec in ipairs(bottomSections) do
         if table.getn(sec.items) > 0 then
@@ -888,10 +903,6 @@ function BankFrame:DisplayItemsByCategory(bankData, isOtherChar, charName)
             break
         end
     end
-    -- Also show bottom section if there are free slots (for Empty drop target)
-    if totalFreeSlots > 0 then
-        hasAnyBottom = true
-    end
 
     if hasAnyBottom then
         y = y - 10
@@ -901,22 +912,7 @@ function BankFrame:DisplayItemsByCategory(bankData, isOtherChar, charName)
         for _, sec in ipairs(bottomSections) do
             local items = sec.items
             local numItems = table.getn(items)
-            if sec.name == "Empty" then
-                numItems = (totalFreeSlots > 0) and 1 or 0
-            end
             if numItems > 0 then
-                if sec.name == "Tools" then
-                    table.sort(items, function(a, b)
-                        -- Guard against nil entries
-                        if not a or not a.itemData then return false end
-                        if not b or not b.itemData then return true end
-                        if (a.itemData.quality or 0) ~= (b.itemData.quality or 0) then
-                            return (a.itemData.quality or 0) > (b.itemData.quality or 0)
-                        end
-                        return (a.itemData.name or "") < (b.itemData.name or "")
-                    end)
-                end
-
                 local blockCols = numItems
                 if blockCols > perRow then blockCols = perRow end
                 local blockRows = math.ceil(numItems / perRow)
@@ -934,59 +930,38 @@ function BankFrame:DisplayItemsByCategory(bankData, isOtherChar, charName)
                 header:SetPoint("TOPLEFT", itemContainer, "TOPLEFT", x + currentBottomX, y)
                 header:SetWidth(blockWidth)
                 header.text:SetText(sec.name)
+                if header.countText then header.countText:SetText("(" .. numItems .. ")"); header.countText:Show() end
                 header:Show()
 
                 local itemY = y - 20
                 local sCol = 0
                 local sRow = 0
-                
-                if sec.name == "Empty" then
-                    local bagID = firstFreeBag or -1
-                    local slotID = firstFreeSlot or 1
-                    local bagParent = self:GetBagParent(bagID)
+
+                for _, item in ipairs(items) do
+                    local bagParent = self:GetBagParent(item.bagID)
                     local button = Guda_GetItemButton(bagParent)
                     button:SetParent(bagParent)
                     button:SetWidth(buttonSize)
                     button:SetHeight(buttonSize)
                     button:ClearAllPoints()
-                    button:SetPoint("TOPLEFT", itemContainer, "TOPLEFT", x + currentBottomX, itemY)
+                    button:SetPoint("TOPLEFT", itemContainer, "TOPLEFT", x + currentBottomX + (sCol * (buttonSize + spacing)), itemY - (sRow * (buttonSize + spacing)))
                     button:Show()
-                    
-                    local emptyItemData = { 
-                        texture = "Interface\\PaperDoll\\UI-PaperDoll-Slot-Bag", 
-                        count = totalFreeSlots, 
-                        name = "Empty Slots" 
-                    }
-                    Guda_ItemButton_SetItem(button, bagID, slotID, emptyItemData, true, isOtherChar and charName or nil, true, true)
-                    button.isReadOnly = false
+                    Guda_ItemButton_SetItem(button, item.bagID, item.slotID, item.itemData, true, isOtherChar and charName or nil, self:PassesSearchFilter(item.itemData), isOtherChar or isReadOnlyMode)
                     button.inUse = true
-                else
-                    for _, item in ipairs(items) do
-                        local bagParent = self:GetBagParent(item.bagID)
-                        local button = Guda_GetItemButton(bagParent)
-                        button:SetParent(bagParent)
-                        button:SetWidth(buttonSize)
-                        button:SetHeight(buttonSize)
-                        button:ClearAllPoints()
-                        button:SetPoint("TOPLEFT", itemContainer, "TOPLEFT", x + currentBottomX + (sCol * (buttonSize + spacing)), itemY - (sRow * (buttonSize + spacing)))
-                        button:Show()
-                        Guda_ItemButton_SetItem(button, item.bagID, item.slotID, item.itemData, true, isOtherChar and charName or nil, self:PassesSearchFilter(item.itemData), isOtherChar or isReadOnlyMode)
-                        button.inUse = true
-                        -- Populate slot lookup for O(1) access
-                        if not bankSlotToButton[item.bagID] then bankSlotToButton[item.bagID] = {} end
-                        bankSlotToButton[item.bagID][item.slotID] = button
+                    -- Populate slot lookup for O(1) access
+                    if not bankSlotToButton[item.bagID] then bankSlotToButton[item.bagID] = {} end
+                    bankSlotToButton[item.bagID][item.slotID] = button
 
-                        sCol = sCol + 1
-                        if sCol >= blockCols then
-                            sCol = 0
-                            sRow = sRow + 1
-                        end
+                    sCol = sCol + 1
+                    if sCol >= blockCols then
+                        sCol = 0
+                        sRow = sRow + 1
                     end
                 end
 
                 if blockHeight > sectionMaxHeight then sectionMaxHeight = blockHeight end
                 currentBottomX = currentBottomX + blockWidth + 20
-                
+
                 if currentBottomX >= totalWidth then
                     currentBottomX = 0
                     y = y - sectionMaxHeight - 5
diff --git a/UI/FrameHelpers.lua b/UI/FrameHelpers.lua
index b353ac7..aa4d322 100644
--- a/UI/FrameHelpers.lua
+++ b/UI/FrameHelpers.lua
@@ -21,7 +21,6 @@ end
 -- Returns nothing, modifies tables in place
 function Guda_CategorizeItem(itemData, bagID, slotID, categories, specialItems, isOtherChar)
     local itemName = itemData.name or ""
-    local itemType = itemData.type or ""
     local cat = "Miscellaneous"
 
     -- Detect consumable restore/eat/drink tag for current character only
@@ -32,38 +31,11 @@ function Guda_CategorizeItem(itemData, bagID, slotID, categories, specialItems,
         end
     end
 
-    -- Priority 1: Special items (Hearthstone, Mounts, Tools)
-    -- These are handled separately and go into specialItems table, not categories
-    if string.find(itemName, "Hearthstone") then
-        -- Only show in Home section if Home category is enabled
-        local showHome = true
-        if addon.Modules.CategoryManager then
-            local homeCat = addon.Modules.CategoryManager:GetCategory("Home")
-            if homeCat then
-                showHome = homeCat.enabled
-            end
-        end
-        if showHome then
-            table.insert(specialItems.Hearthstone, {bagID = bagID, slotID = slotID, itemData = itemData})
-        end
-        -- Always return - if Home is disabled, Hearthstone is hidden completely
-        return
-    elseif addon.Modules.SortEngine and addon.Modules.SortEngine.IsMount and addon.Modules.SortEngine.IsMount(itemData.texture) then
+    -- Special items: only Mounts are handled separately now
+    -- Home and Tools are real categories handled by CategoryManager rules
+    if addon.Modules.SortEngine and addon.Modules.SortEngine.IsMount and addon.Modules.SortEngine.IsMount(itemData.texture) then
         table.insert(specialItems.Mount, {bagID = bagID, slotID = slotID, itemData = itemData})
         return
-    elseif string.find(itemName, "Runed .* Rod") or
-       itemType == "Fishing Pole" or
-       string.find(itemName, "Mining Pick") or
-       string.find(itemName, "Blacksmith Hammer") or
-       itemName == "Arclight Spanner" or
-       itemName == "Gyromatic Micro-Adjustor" or
-       itemName == "Philosopher's Stone" or
-       string.find(itemName, "Skinning Knife") or
-       itemName == "Blood Scythe" or
-       string.find(itemName, "Jeweler") or
-       string.find(itemName, "Jewelry Kit") then
-        table.insert(specialItems.Tools, {bagID = bagID, slotID = slotID, itemData = itemData})
-        return
     end
 
     -- Use CategoryManager rule engine if available, otherwise fall back to legacy logic
@@ -218,22 +190,20 @@ function Guda_InitCategories()
     end
 
     -- Reuse or create specialItems table
+    -- Only Mount remains as a special item; Home and Tools are now real categories
     if not specialItemsCache then
         specialItemsCache = {
-            Hearthstone = {},
             Mount = {},
-            Tools = {}
         }
     else
-        WipeTable(specialItemsCache.Hearthstone)
         WipeTable(specialItemsCache.Mount)
-        WipeTable(specialItemsCache.Tools)
     end
 
     return categoriesCache, specialItemsCache
 end
 
--- Sort items within a category
+-- Sort items within a category (or merged group)
+-- Items may have a categoryOrderIndex field set by merged group display
 function Guda_SortCategoryItems(items)
     if not items then return end
     table.sort(items, function(a, b)
@@ -243,6 +213,13 @@ function Guda_SortCategoryItems(items)
         if not a.itemData then return false end
         if not b.itemData then return true end
 
+        -- Primary: category order index (for merged groups)
+        local oa = a.categoryOrderIndex or 0
+        local ob = b.categoryOrderIndex or 0
+        if oa ~= ob then
+            return oa < ob
+        end
+
         -- Rank Trade Goods: meat (name ends with 'meat') = 2, egg (contains 'egg') = 1, others = 0
         local function tgRank(d)
             if not d or not d.name then return 0 end
@@ -290,10 +267,18 @@ function Guda_GetSectionHeader(framePrefix, containerName, index)
         header = CreateFrame("Frame", name, container)
         header:SetHeight(20)
         header:EnableMouse(true)
+
+        -- Category name text
         local text = header:CreateFontString(nil, "OVERLAY", "GameFontNormal")
         text:SetPoint("LEFT", header, "LEFT", 0, 0)
         header.text = text
 
+        -- Item count text
+        local countText = header:CreateFontString(nil, "OVERLAY", "GameFontNormalSmall")
+        countText:SetPoint("LEFT", text, "RIGHT", 4, 0)
+        countText:SetTextColor(0.6, 0.6, 0.6)
+        header.countText = countText
+
         header:SetScript("OnEnter", function()
             if this.fullName and this.isShortened then
                 GameTooltip:SetOwner(this, "ANCHOR_TOP")
diff --git a/UI/ItemButton.lua b/UI/ItemButton.lua
index 2cf1c03..e3cb1f5 100644
--- a/UI/ItemButton.lua
+++ b/UI/ItemButton.lua
@@ -639,6 +639,8 @@ local function ResetButtonVisualState(self)
     HideInnerShadow(self.innerShadow)
     if self.unusableOverlay then self.unusableOverlay:Hide() end
     HideJunkIcon(self)
+    if self.categoryMarkIcon then self.categoryMarkIcon:Hide() end
+    if self.categoryMarkShadow then self.categoryMarkShadow:Hide() end
 
     -- Clear cooldown overlay
     local cd = getglobal(self:GetName().."Cooldown") or self.cooldown
@@ -738,11 +740,9 @@ local function UpdateEmptySlotBackground(self, emptySlotBg, iconSize)
     if not emptySlotBg then return end
 
     emptySlotBg:ClearAllPoints()
-    -- Use smaller padding for small icons
-    local bgPadding = iconSize < 44 and 1 or 2
-    emptySlotBg:SetPoint("TOPLEFT", self, "TOPLEFT", -bgPadding, bgPadding)
-    emptySlotBg:SetPoint("BOTTOMRIGHT", self, "BOTTOMRIGHT", bgPadding, -bgPadding)
-    emptySlotBg:SetTexCoord(0.1, 0.9, 0.1, 0.9)
+    emptySlotBg:SetPoint("TOPLEFT", self, "TOPLEFT", 0, 0)
+    emptySlotBg:SetPoint("BOTTOMRIGHT", self, "BOTTOMRIGHT", 0, 0)
+    emptySlotBg:SetTexCoord(0.17, 0.83, 0.17, 0.83)
 end
 
 -- Resize texture elements to match button size
@@ -793,12 +793,11 @@ local function PositionIconAndBorders(self, iconSize)
 
     if not iconTexture or not self.hasItem then return end
 
-    -- Calculate icon inset based on size
-    local iconInset = iconSize < 44 and 10 or 15
-    local iconDisplaySize = iconSize - iconInset
+    -- Icon fills the full button slot
+    local iconDisplaySize = iconSize
 
     iconTexture:ClearAllPoints()
-    iconTexture:SetPoint("CENTER", self, "CENTER", -0.5, 0.5)
+    iconTexture:SetPoint("CENTER", self, "CENTER", 0, 0)
     iconTexture:SetWidth(iconDisplaySize)
     iconTexture:SetHeight(iconDisplaySize)
     iconTexture:SetTexCoord(0.08, 0.92, 0.08, 0.92)
@@ -807,15 +806,15 @@ local function PositionIconAndBorders(self, iconSize)
     -- Position quality border around the icon
     if self.qualityBorder then
         self.qualityBorder:ClearAllPoints()
-        self.qualityBorder:SetPoint("TOPLEFT", iconTexture, "TOPLEFT", -5, 5)
-        self.qualityBorder:SetPoint("BOTTOMRIGHT", iconTexture, "BOTTOMRIGHT", 5, -5)
+        self.qualityBorder:SetPoint("TOPLEFT", iconTexture, "TOPLEFT", -1, 1)
+        self.qualityBorder:SetPoint("BOTTOMRIGHT", iconTexture, "BOTTOMRIGHT", 1, -1)
     end
 
     -- Position quest border around the icon
     if self.questBorder then
         self.questBorder:ClearAllPoints()
-        self.questBorder:SetPoint("TOPLEFT", iconTexture, "TOPLEFT", -5, 5)
-        self.questBorder:SetPoint("BOTTOMRIGHT", iconTexture, "BOTTOMRIGHT", 5, -5)
+        self.questBorder:SetPoint("TOPLEFT", iconTexture, "TOPLEFT", -1, 1)
+        self.questBorder:SetPoint("BOTTOMRIGHT", iconTexture, "BOTTOMRIGHT", 1, -1)
     end
 
     -- Position quest icon in top-right corner
@@ -1056,15 +1055,12 @@ function Guda_ItemButton_SetItem(self, bagID, slotID, itemData, isBank, otherCha
         end
     end
 
-    -- Resize empty slot background to match icon size (slightly larger to ensure coverage)
+    -- Resize empty slot background to fill the full button
     if emptySlotBg then
         emptySlotBg:ClearAllPoints()
-        -- Use smaller padding for small icons
-        local bgPadding = iconSize < 44 and 1 or 2
-        emptySlotBg:SetPoint("TOPLEFT", self, "TOPLEFT", -bgPadding, bgPadding)
-        emptySlotBg:SetPoint("BOTTOMRIGHT", self, "BOTTOMRIGHT", bgPadding, -bgPadding)
-        -- Crop texture edges slightly to remove any built-in padding
-        emptySlotBg:SetTexCoord(0.1, 0.9, 0.1, 0.9)
+        emptySlotBg:SetPoint("TOPLEFT", self, "TOPLEFT", 0, 0)
+        emptySlotBg:SetPoint("BOTTOMRIGHT", self, "BOTTOMRIGHT", 0, 0)
+        emptySlotBg:SetTexCoord(0.17, 0.83, 0.17, 0.83)
     end
 
     -- Also resize the underlying slot textures so the border/background scale with the button.
@@ -1231,11 +1227,49 @@ function Guda_ItemButton_SetItem(self, bagID, slotID, itemData, isBank, otherCha
             end
         end
 
-        -- Check if item is junk using the CategoryManager
+        -- Check if item is junk and get category mark using the CategoryManager
         local isJunk = false
+        local categoryMarkTexture = nil
         if itemData and addon.Modules.CategoryManager then
             local category = addon.Modules.CategoryManager:CategorizeItem(itemData, bagID, slotID, self.otherChar)
             isJunk = (category == "Junk")
+            -- Get category mark icon if set
+            local catDef = addon.Modules.CategoryManager:GetCategory(category)
+            if catDef and catDef.categoryMark then
+                categoryMarkTexture = catDef.categoryMark
+            end
+        end
+
+        -- Update category mark overlay (bottom-left of icon texture)
+        if categoryMarkTexture then
+            local iconTex = getglobal(self:GetName().."IconTexture") or getglobal(self:GetName().."Icon") or self.icon or self.Icon
+            local anchor = iconTex or self
+            -- Create mark textures lazily
+            if not self.categoryMarkShadow then
+                self.categoryMarkShadow = self:CreateTexture(nil, "OVERLAY")
+                self.categoryMarkShadow:SetVertexColor(0, 0, 0, 1)
+            end
+            if not self.categoryMarkIcon then
+                self.categoryMarkIcon = self:CreateTexture(nil, "OVERLAY")
+            end
+            -- Size relative to icon (roughly 40% of icon display size)
+            local markSize = math.max(10, math.floor(iconSize * 0.3))
+            local shadowSize = markSize + 2
+            self.categoryMarkShadow:SetWidth(shadowSize)
+            self.categoryMarkShadow:SetHeight(shadowSize)
+            self.categoryMarkShadow:ClearAllPoints()
+            self.categoryMarkShadow:SetPoint("BOTTOMLEFT", anchor, "BOTTOMLEFT", -1, -1)
+            self.categoryMarkIcon:SetWidth(markSize)
+            self.categoryMarkIcon:SetHeight(markSize)
+            self.categoryMarkIcon:ClearAllPoints()
+            self.categoryMarkIcon:SetPoint("BOTTOMLEFT", anchor, "BOTTOMLEFT", 0, 0)
+            self.categoryMarkShadow:SetTexture(categoryMarkTexture)
+            self.categoryMarkShadow:Show()
+            self.categoryMarkIcon:SetTexture(categoryMarkTexture)
+            self.categoryMarkIcon:Show()
+        else
+            if self.categoryMarkIcon then self.categoryMarkIcon:Hide() end
+            if self.categoryMarkShadow then self.categoryMarkShadow:Hide() end
         end
 
         -- Search filtering and junk opacity
@@ -1410,37 +1444,28 @@ function Guda_ItemButton_SetItem(self, bagID, slotID, itemData, isBank, otherCha
 
     if iconTexture then
         if self.hasItem then
-            -- Scale icon proportionally based on button size
-            -- For icons < 44: use smaller inset (4px) for better fit
-            -- For icons >= 44: use larger inset (15px) for classic look
-            local iconInset
-            if iconSize < 44 then
-                iconInset = 10  -- Small inset for small icons
-            else
-                iconInset = 15 -- Larger inset for larger icons
-            end
-
-            local iconDisplaySize = iconSize - iconInset
+            -- Icon fills the full button slot
+            local iconDisplaySize = iconSize
             iconTexture:ClearAllPoints()
-            iconTexture:SetPoint("CENTER", self, "CENTER", -0.5, 0.5)
+            iconTexture:SetPoint("CENTER", self, "CENTER", 0, 0)
             iconTexture:SetWidth(iconDisplaySize)
             iconTexture:SetHeight(iconDisplaySize)
             -- Crop icon edges slightly
             iconTexture:SetTexCoord(0.08, 0.92, 0.08, 0.92)
             iconTexture:Show()
 
-            -- Position quality border around the icon (not the slot)
+            -- Position quality border around the icon
             if self.qualityBorder then
                 self.qualityBorder:ClearAllPoints()
-                self.qualityBorder:SetPoint("TOPLEFT", iconTexture, "TOPLEFT", -5, 5)
-                self.qualityBorder:SetPoint("BOTTOMRIGHT", iconTexture, "BOTTOMRIGHT", 5, -5)
+                self.qualityBorder:SetPoint("TOPLEFT", iconTexture, "TOPLEFT", -1, 1)
+                self.qualityBorder:SetPoint("BOTTOMRIGHT", iconTexture, "BOTTOMRIGHT", 1, -1)
             end
 
-            -- Position quest border around the icon (same as quality border)
+            -- Position quest border around the icon
             if self.questBorder then
                 self.questBorder:ClearAllPoints()
-                self.questBorder:SetPoint("TOPLEFT", iconTexture, "TOPLEFT", -5, 5)
-                self.questBorder:SetPoint("BOTTOMRIGHT", iconTexture, "BOTTOMRIGHT", 5, -5)
+                self.questBorder:SetPoint("TOPLEFT", iconTexture, "TOPLEFT", -1, 1)
+                self.questBorder:SetPoint("BOTTOMRIGHT", iconTexture, "BOTTOMRIGHT", 1, -1)
             end
 
             -- Position quest icon in top-right corner
diff --git a/UI/SettingsPopup.lua b/UI/SettingsPopup.lua
index b147bca..99c6b1b 100644
--- a/UI/SettingsPopup.lua
+++ b/UI/SettingsPopup.lua
@@ -92,9 +92,9 @@ function Guda_SettingsPopup_OnShow(self)
     -- Load current settings
     local bagColumns = Guda.Modules.DB:GetSetting("bagColumns") or 10
     local bankColumns = Guda.Modules.DB:GetSetting("bankColumns") or 10
-    local iconSize = Guda.Modules.DB:GetSetting("iconSize") or 40
+    local iconSize = Guda.Modules.DB:GetSetting("iconSize") or 37
     local iconFontSize = Guda.Modules.DB:GetSetting("iconFontSize") or 12
-    local iconSpacing = Guda.Modules.DB:GetSetting("iconSpacing") or 0
+    local iconSpacing = Guda.Modules.DB:GetSetting("iconSpacing") or 3
     local lockBags = Guda.Modules.DB:GetSetting("lockBags")
     if lockBags == nil then
         lockBags = false
@@ -438,7 +438,7 @@ function Guda_SettingsPopup_IconSizeSlider_OnLoad(self)
     self:SetMinMaxValues(22, 64)
     self:SetValueStep(1)
 
-    local currentValue = Guda.Modules.DB:GetSetting("iconSize") or addon.Constants.BUTTON_SIZE
+    local currentValue = Guda.Modules.DB:GetSetting("iconSize") or 37
     self:SetValue(currentValue)
 end
 
@@ -503,7 +503,7 @@ end
 
 -- Icon Spacing Slider OnLoad
 function Guda_SettingsPopup_IconSpacingSlider_OnLoad(self)
-    getglobal(self:GetName().."Low"):SetText("-10px")
+    getglobal(self:GetName().."Low"):SetText("0px")
     getglobal(self:GetName().."High"):SetText("20px")
 
     local text = getglobal(self:GetName().."Text")
@@ -515,10 +515,10 @@ function Guda_SettingsPopup_IconSpacingSlider_OnLoad(self)
         text:SetFont(font, 12, flags)
     end
 
-    self:SetMinMaxValues(-10, 20)
+    self:SetMinMaxValues(0, 20)
     self:SetValueStep(1)
 
-    local currentValue = Guda.Modules.DB:GetSetting("iconSpacing") or 0
+    local currentValue = Guda.Modules.DB:GetSetting("iconSpacing") or 3
     self:SetValue(currentValue)
 end
 
@@ -1409,6 +1409,30 @@ local function GetCategoryRowFrame(index)
     return row
 end
 
+-- Build a flat display list with group headers inserted
+local function BuildCategoryDisplayList()
+    if not Guda.Modules.CategoryManager then return {}, 0 end
+
+    local categoryOrder = Guda.Modules.CategoryManager:GetCategoryOrder()
+    local displayList = {}  -- entries: { type = "header"|"category", groupName, categoryId, categoryDef }
+    local lastGroup = nil
+
+    for _, catId in ipairs(categoryOrder) do
+        local catDef = Guda.Modules.CategoryManager:GetCategory(catId)
+        if catDef then
+            local group = catDef.group or "Main"
+            -- Insert group header if group changed
+            if group ~= lastGroup then
+                table.insert(displayList, { type = "header", groupName = group })
+                lastGroup = group
+            end
+            table.insert(displayList, { type = "category", categoryId = catId, categoryDef = catDef })
+        end
+    end
+
+    return displayList, table.getn(displayList)
+end
+
 -- Update the category list display
 function Guda_SettingsPopup_CategoriesTab_Update()
     if not Guda.Modules.CategoryManager then return end
@@ -1416,11 +1440,10 @@ function Guda_SettingsPopup_CategoriesTab_Update()
     local scrollFrame = getglobal("Guda_SettingsPopup_CategoriesScrollFrame")
     if not scrollFrame then return end
 
-    local categoryOrder = Guda.Modules.CategoryManager:GetCategoryOrder()
-    local totalCategories = table.getn(categoryOrder)
+    local displayList, totalEntries = BuildCategoryDisplayList()
 
     -- Update scroll frame
-    FauxScrollFrame_Update(scrollFrame, totalCategories, CATEGORY_VISIBLE_ROWS, CATEGORY_ROW_HEIGHT)
+    FauxScrollFrame_Update(scrollFrame, totalEntries, CATEGORY_VISIBLE_ROWS, CATEGORY_ROW_HEIGHT)
 
     local offset = FauxScrollFrame_GetOffset(scrollFrame)
 
@@ -1428,13 +1451,28 @@ function Guda_SettingsPopup_CategoriesTab_Update()
         local row = GetCategoryRowFrame(i)
         if row then
             local dataIndex = i + offset
-            if dataIndex <= totalCategories then
-                local categoryId = categoryOrder[dataIndex]
-                local categoryDef = Guda.Modules.CategoryManager:GetCategory(categoryId)
+            if dataIndex <= totalEntries then
+                local entry = displayList[dataIndex]
+
+                if entry.type == "header" then
+                    -- Show as group header row
+                    row.categoryId = nil
+                    row.nameText:SetText("|cffffd100-- " .. entry.groupName .. " --|r")
+                    row.nameText:SetTextColor(1, 0.82, 0)
+                    row.checkbox:Hide()
+                    row.editBtn:Hide()
+                    row.upBtn:Hide()
+                    row.downBtn:Hide()
+                    row.deleteBtn:Hide()
+                    row.builtInText:Hide()
+                    row:Show()
+                elseif entry.type == "category" then
+                    local categoryId = entry.categoryId
+                    local categoryDef = entry.categoryDef
 
-                if categoryDef then
                     row.categoryId = categoryId
                     row.nameText:SetText(categoryDef.name or categoryId)
+                    row.checkbox:Show()
                     row.checkbox:SetChecked(categoryDef.enabled and 1 or 0)
 
                     -- Show/hide delete button based on whether it's built-in
@@ -1458,24 +1496,17 @@ function Guda_SettingsPopup_CategoriesTab_Update()
                         row.upBtn:Show()
                         row.downBtn:Show()
 
-                        -- Enable/disable move buttons based on position
-                        if dataIndex == 1 then
-                            row.upBtn:Disable()
+                        -- Enable/disable move buttons based on group-aware boundaries
+                        if Guda.Modules.CategoryManager:CanMoveUp(categoryId) then
+                            row.upBtn:Enable()
                         else
-                            -- Check if category above has hideControls (can't move above it)
-                            local aboveCatId = categoryOrder[dataIndex - 1]
-                            local aboveCatDef = Guda.Modules.CategoryManager:GetCategory(aboveCatId)
-                            if aboveCatDef and aboveCatDef.hideControls then
-                                row.upBtn:Disable()
-                            else
-                                row.upBtn:Enable()
-                            end
+                            row.upBtn:Disable()
                         end
 
-                        if dataIndex == totalCategories then
-                            row.downBtn:Disable()
-                        else
+                        if Guda.Modules.CategoryManager:CanMoveDown(categoryId) then
                             row.downBtn:Enable()
+                        else
+                            row.downBtn:Disable()
                         end
                     end
 
@@ -1512,30 +1543,21 @@ end
 function Guda_SettingsPopup_AddCategory_OnClick()
     if not Guda.Modules.CategoryManager then return end
 
-    -- Generate unique ID
-    local baseId = "Custom"
-    local counter = 1
-    local newId = baseId .. counter
-
-    local cats = Guda.Modules.CategoryManager:GetCategories()
-    while cats.definitions[newId] do
-        counter = counter + 1
-        newId = baseId .. counter
-    end
-
     -- Create new category definition
     local newDef = {
-        name = "Custom " .. counter,
+        name = "Custom Category",
         icon = "Interface\\Icons\\INV_Misc_QuestionMark",
         rules = {},
         matchMode = "any",
         priority = 80,
         enabled = true,
         isBuiltIn = false,
+        group = Guda.Modules.CategoryManager:GetGroupMain(),
     }
 
-    -- Add to database
-    if Guda.Modules.CategoryManager:AddCategory(newId, newDef) then
+    -- Add to database with auto-generated ID
+    local success, newId = Guda.Modules.CategoryManager:AddCategory(nil, newDef)
+    if success and newId then
         -- Update display
         Guda_SettingsPopup_CategoriesTab_Update()
         -- Open editor for the new category
@@ -1577,8 +1599,19 @@ end
 
 local editorCategoryId = nil
 local editorMatchMode = "any"
+local editorGroup = "Main"
+local editorMark = nil  -- current category mark texture path or nil
 local editorRules = {}
 local editorRuleFrames = {}
+
+-- Available mark icons (texture paths)
+local MARK_ICONS = {
+    "Interface\\AddOns\\Guda\\Assets\\equipment",
+    "Interface\\AddOns\\Guda\\Assets\\plus",
+    "Interface\\AddOns\\Guda\\Assets\\fav",
+    "Interface\\AddOns\\Guda\\Assets\\combat",
+    "Interface\\AddOns\\Guda\\Assets\\Cog",
+}
 local RULE_ROW_HEIGHT = 28
 local MAX_RULES = 22
 
@@ -1625,6 +1658,91 @@ function Guda_CategoryEditor_OnLoad(self)
     local cancelBtn = getglobal("Guda_CategoryEditor_CancelButton")
     if cancelBtn then cancelBtn:SetText("Cancel") end
 
+    -- Create group EditBox if it doesn't exist
+    if not getglobal("Guda_CategoryEditor_GroupEditBox") then
+        local nameBox = getglobal("Guda_CategoryEditor_NameEditBox")
+        if nameBox then
+            -- Label
+            local groupLabel = self:CreateFontString("Guda_CategoryEditor_GroupLabel", "OVERLAY", "GameFontNormalSmall")
+            groupLabel:SetPoint("LEFT", nameBox, "RIGHT", 14, 0)
+            groupLabel:SetText("Group:")
+            groupLabel:SetTextColor(0.7, 0.7, 0.7)
+
+            -- EditBox
+            local groupBox = CreateFrame("EditBox", "Guda_CategoryEditor_GroupEditBox", self, "InputBoxTemplate")
+            groupBox:SetWidth(100)
+            groupBox:SetHeight(22)
+            groupBox:SetPoint("LEFT", groupLabel, "RIGHT", 6, 0)
+            groupBox:SetAutoFocus(false)
+            groupBox:SetMaxLetters(20)
+            groupBox:SetScript("OnEscapePressed", function() this:ClearFocus() end)
+            groupBox:SetScript("OnEnterPressed", function() this:ClearFocus() end)
+        end
+    end
+
+    -- Create mark icon selector row
+    if not getglobal("Guda_CategoryEditor_MarkLabel") then
+        local MARK_BTN_SIZE = 22
+        local MARK_BTN_SPACING = 6
+
+        local markLabel = self:CreateFontString("Guda_CategoryEditor_MarkLabel", "OVERLAY", "GameFontNormalSmall")
+        markLabel:SetPoint("TOPLEFT", self, "TOPLEFT", 20, -68)
+        markLabel:SetText("Mark:")
+        markLabel:SetTextColor(0.7, 0.7, 0.7)
+
+        -- "None" button (first)
+        local noneBtn = CreateFrame("Button", "Guda_CategoryEditor_MarkNone", self)
+        noneBtn:SetWidth(MARK_BTN_SIZE)
+        noneBtn:SetHeight(MARK_BTN_SIZE)
+        noneBtn:SetPoint("LEFT", markLabel, "RIGHT", 8, 0)
+        noneBtn:SetBackdrop({ bgFile = "Interface\\Buttons\\WHITE8x8", edgeFile = "Interface\\Buttons\\WHITE8x8", edgeSize = 1 })
+        noneBtn:SetBackdropColor(0.15, 0.15, 0.15, 0.8)
+        noneBtn:SetBackdropBorderColor(0.4, 0.4, 0.4, 1)
+        noneBtn.markPath = nil
+
+        local noneTex = noneBtn:CreateTexture(nil, "ARTWORK")
+        noneTex:SetWidth(12)
+        noneTex:SetHeight(12)
+        noneTex:SetPoint("CENTER", noneBtn, "CENTER", 0, 0)
+        noneTex:SetTexture("Interface\\Buttons\\UI-StopButton")
+        noneTex:SetVertexColor(0.6, 0.6, 0.6)
+
+        noneBtn:SetScript("OnClick", function()
+            editorMark = nil
+            Guda_CategoryEditor_UpdateMarkButtons()
+        end)
+
+        self.markButtons = { noneBtn }
+
+        -- Icon buttons
+        local prevBtn = noneBtn
+        for i = 1, table.getn(MARK_ICONS) do
+            local iconPath = MARK_ICONS[i]
+            local btn = CreateFrame("Button", "Guda_CategoryEditor_Mark" .. i, self)
+            btn:SetWidth(MARK_BTN_SIZE)
+            btn:SetHeight(MARK_BTN_SIZE)
+            btn:SetPoint("LEFT", prevBtn, "RIGHT", MARK_BTN_SPACING, 0)
+            btn:SetBackdrop({ bgFile = "Interface\\Buttons\\WHITE8x8", edgeFile = "Interface\\Buttons\\WHITE8x8", edgeSize = 1 })
+            btn:SetBackdropColor(0.15, 0.15, 0.15, 0.8)
+            btn:SetBackdropBorderColor(0.4, 0.4, 0.4, 1)
+            btn.markPath = iconPath
+
+            local tex = btn:CreateTexture(nil, "ARTWORK")
+            tex:SetWidth(16)
+            tex:SetHeight(16)
+            tex:SetPoint("CENTER", btn, "CENTER", 0, 0)
+            tex:SetTexture(iconPath)
+
+            btn:SetScript("OnClick", function()
+                editorMark = this.markPath
+                Guda_CategoryEditor_UpdateMarkButtons()
+            end)
+
+            table.insert(self.markButtons, btn)
+            prevBtn = btn
+        end
+    end
+
     -- Create radio button labels
     local anyRadio = getglobal("Guda_CategoryEditor_MatchAny")
     if anyRadio then
@@ -1641,6 +1759,19 @@ function Guda_CategoryEditor_OnLoad(self)
     end
 end
 
+-- Update mark button highlights (gold = selected, gray = unselected)
+function Guda_CategoryEditor_UpdateMarkButtons()
+    local editor = getglobal("Guda_CategoryEditor")
+    if not editor or not editor.markButtons then return end
+    for _, btn in ipairs(editor.markButtons) do
+        if btn.markPath == editorMark then
+            btn:SetBackdropBorderColor(1, 0.82, 0, 1)
+        else
+            btn:SetBackdropBorderColor(0.4, 0.4, 0.4, 1)
+        end
+    end
+end
+
 -- OnShow for Category Editor
 function Guda_CategoryEditor_OnShow(self)
     Guda_CategoryEditor_UpdateRulesDisplay()
@@ -1655,6 +1786,8 @@ function Guda_CategoryEditor_Open(categoryId)
 
     editorCategoryId = categoryId
     editorMatchMode = categoryDef.matchMode or "any"
+    editorGroup = categoryDef.group or "Main"
+    editorMark = categoryDef.categoryMark or nil
 
     -- Copy rules
     editorRules = {}
@@ -1690,9 +1823,29 @@ function Guda_CategoryEditor_Open(categoryId)
         end
     end
 
+    -- Set group EditBox
+    local groupBox = getglobal("Guda_CategoryEditor_GroupEditBox")
+    if groupBox then
+        groupBox:SetText(editorGroup or "")
+        -- Disable group editing for built-in categories
+        if categoryDef.isBuiltIn then
+            groupBox:EnableMouse(false)
+            groupBox:EnableKeyboard(false)
+            groupBox:SetTextColor(0.5, 0.5, 0.5)
+        else
+            groupBox:EnableMouse(true)
+            groupBox:EnableKeyboard(true)
+            groupBox:SetTextColor(1, 1, 1)
+        end
+        groupBox:ClearFocus()
+    end
+
     -- Set match mode
     Guda_CategoryEditor_SetMatchMode(editorMatchMode)
 
+    -- Update mark button highlights
+    Guda_CategoryEditor_UpdateMarkButtons()
+
     -- Show editor
     local editor = getglobal("Guda_CategoryEditor")
     if editor then
@@ -1700,6 +1853,8 @@ function Guda_CategoryEditor_Open(categoryId)
     end
 end
 
+-- (Group is now an EditBox — no dropdown needed)
+
 -- Set match mode (radio buttons)
 function Guda_CategoryEditor_SetMatchMode(mode)
     editorMatchMode = mode
@@ -2065,6 +2220,9 @@ function Guda_CategoryEditor_Save()
     -- Set match mode
     categoryDef.matchMode = editorMatchMode
 
+    -- Set category mark
+    categoryDef.categoryMark = editorMark
+
     -- Set rules
     categoryDef.rules = {}
     for _, rule in ipairs(editorRules) do
@@ -2073,8 +2231,29 @@ function Guda_CategoryEditor_Save()
         end
     end
 
-    -- Save to database
-    Guda.Modules.CategoryManager:UpdateCategory(editorCategoryId, categoryDef)
+    -- Read group from EditBox
+    local groupBox = getglobal("Guda_CategoryEditor_GroupEditBox")
+    local newGroup = "Main" -- default
+    if groupBox then
+        local text = groupBox:GetText() or ""
+        -- Trim whitespace
+        text = string.gsub(text, "^%s+", "")
+        text = string.gsub(text, "%s+$", "")
+        if text ~= "" then
+            newGroup = text
+        end
+    end
+
+    -- Set group (handle group change via SetCategoryGroup for proper reordering)
+    local oldGroup = categoryDef.group or "Main"
+    if newGroup ~= oldGroup then
+        -- Save definition first, then move group
+        Guda.Modules.CategoryManager:UpdateCategory(editorCategoryId, categoryDef)
+        Guda.Modules.CategoryManager:SetCategoryGroup(editorCategoryId, newGroup)
+    else
+        -- Save to database
+        Guda.Modules.CategoryManager:UpdateCategory(editorCategoryId, categoryDef)
+    end
 
     -- Refresh displays
     Guda_SettingsPopup_CategoriesTab_Update()
diff --git a/UI/SettingsPopup.xml b/UI/SettingsPopup.xml
index 20c0322..800dc95 100644
--- a/UI/SettingsPopup.xml
+++ b/UI/SettingsPopup.xml
@@ -919,7 +919,7 @@
             <!-- Name EditBox -->
             <EditBox name="Guda_CategoryEditor_NameEditBox" autoFocus="false" inherits="InputBoxTemplate">
                 <Size>
-                    <AbsDimension x="200" y="20"/>
+                    <AbsDimension x="150" y="20"/>
                 </Size>
                 <Anchors>
                     <Anchor point="TOPLEFT">
@@ -946,7 +946,7 @@
                 <Anchors>
                     <Anchor point="TOPLEFT">
                         <Offset>
-                            <AbsDimension x="100" y="-77"/>
+                            <AbsDimension x="100" y="-97"/>
                         </Offset>
                     </Anchor>
                 </Anchors>
@@ -979,12 +979,12 @@
             <!-- Rules ScrollFrame -->
             <ScrollFrame name="Guda_CategoryEditor_RulesScrollFrame" inherits="FauxScrollFrameTemplate">
                 <Size>
-                    <AbsDimension x="335" y="280"/>
+                    <AbsDimension x="335" y="260"/>
                 </Size>
                 <Anchors>
                     <Anchor point="TOPLEFT">
                         <Offset>
-                            <AbsDimension x="20" y="-130"/>
+                            <AbsDimension x="20" y="-150"/>
                         </Offset>
                     </Anchor>
                 </Anchors>
@@ -1013,7 +1013,7 @@
                 <Anchors>
                     <Anchor point="TOPRIGHT">
                         <Offset>
-                            <AbsDimension x="-20" y="-112"/>
+                            <AbsDimension x="-20" y="-132"/>
                         </Offset>
                     </Anchor>
                 </Anchors>