diff --git a/gen/functions.cpp b/gen/functions.cpp
index 19a627d6..82bb67e7 100644
--- a/gen/functions.cpp
+++ b/gen/functions.cpp
@@ -725,13 +725,6 @@ void DtoDefineFunction(FuncDeclaration* fd)
         fd->vthis->ir.irParam->isVthis = true;
 
         DtoDwarfLocalVariable(thismem, fd->vthis);
-
-    #if DMDV1
-        if (fd->vthis->nestedref)
-        {
-            fd->nestedVars.insert(fd->vthis);
-        }
-    #endif
     }
 
     // give the 'nestArg' storage
@@ -790,12 +783,18 @@ void DtoDefineFunction(FuncDeclaration* fd)
         }
     }
 
-// need result variable? (nested)
+
 #if DMDV1
+    // need result variable? (nested)
     if (fd->vresult && fd->vresult->nestedref) {
         Logger::println("nested vresult value: %s", fd->vresult->toChars());
         fd->nestedVars.insert(fd->vresult);
     }
+
+    if (fd->vthis && fd->vthis->nestedref && !fd->nestedVars.empty()) {
+        Logger::println("nested vthis value: %s", fd->vthis->toChars());
+        fd->nestedVars.insert(fd->vthis);
+    }
 #endif
 
     FuncGen fg;
diff --git a/gen/nested.cpp b/gen/nested.cpp
index 7d544875..9d713698 100644
--- a/gen/nested.cpp
+++ b/gen/nested.cpp
@@ -134,11 +134,22 @@ DValue* DtoNestedVariable(Loc loc, Type* astype, VarDeclaration* vd, bool byref)
         LLValue* val = irfunc->thisArg;
         if (cd->isClassDeclaration())
             val = DtoLoad(val);
+        ctx = DtoLoad(DtoGEPi(val, 0, cd->vthis->ir.irField->index, ".vthis"));
     #else
         ClassDeclaration* cd = irfunc->decl->isMember2()->isClassDeclaration();
         LLValue* val = DtoLoad(irfunc->thisArg);
+        ctx = DtoGEPi(val, 0, cd->vthis->ir.irField->index, ".vthis");
+
+        if (!irfunc->frameType && vd->isThisDeclaration())
+        {
+            // If the only "nested" variable is the outer this pointer, we don't
+            // emit a normal context, but just store the this pointer - see
+            // GitHub #127.
+            return new DVarValue(astype, vd, ctx);
+        }
+
+        ctx = DtoLoad(ctx);
     #endif
-        ctx = DtoLoad(DtoGEPi(val, 0,cd->vthis->ir.irField->index, ".vthis"));
     }
     else if (irfunc->nestedVar) {
         ctx = irfunc->nestedVar;
@@ -311,12 +322,14 @@ LLValue* DtoNestedContext(Loc loc, Dsymbol* sym)
 #if DMDV2
         AggregateDeclaration* ad = irfunc->decl->isMember2();
         val = ad->isClassDeclaration() ? DtoLoad(irfunc->thisArg) : irfunc->thisArg;
+        if (!ad || !ad->vthis)
+            return llvm::UndefValue::get(getVoidPtrType());
 #else
         ClassDeclaration* ad = irfunc->decl->isMember2()->isClassDeclaration();
         val = DtoLoad(irfunc->thisArg);
-#endif
         if (!ad || !ad->vthis)
-            return llvm::UndefValue::get(getVoidPtrType());
+            return val;
+#endif
         val = DtoLoad(DtoGEPi(val, 0,ad->vthis->ir.irField->index, ".vthis"));
     }
     else