diff --git a/CMakeLists.txt b/CMakeLists.txt
index 1a3940e..62fa92d 100644
--- a/CMakeLists.txt
+++ b/CMakeLists.txt
@@ -54,7 +54,7 @@ macro(RAGEL_TARGET Name Input Output)
 endmacro()
 
 
-RAGEL_TARGET(phase1 phase1.rl phase1.cpp COMPILE_FLAGS "-p -G2")
+#RAGEL_TARGET(phase1 phase1.rl phase1.cpp COMPILE_FLAGS "-p -G2")
 RAGEL_TARGET(phase2 phase2.rl phase2.cpp COMPILE_FLAGS "-p -G2")
 RAGEL_TARGET(pathnames pathnames.rl pathnames.cpp COMPILE_FLAGS "-p -G2")
 RAGEL_TARGET(mpw-shell-token mpw-shell-token.rl mpw-shell-token.cpp COMPILE_FLAGS "-p -G2")
diff --git a/phase1.cpp b/phase1.cpp
new file mode 100644
index 0000000..2af7e09
--- /dev/null
+++ b/phase1.cpp
@@ -0,0 +1,179 @@
+#include "phase1.h"
+#include <cassert>
+
+enum {
+	st_text,
+	st_text_esc,
+
+	st_comment,
+
+	st_vstring,
+	st_vstring_esc,
+
+	st_dstring,
+	st_dstring_esc,
+
+	st_sstring,
+	st_sstring_esc,
+
+	st_estring,
+	st_estring1,
+	st_estring1_esc,
+
+	st_estring2,
+	st_estring2_esc,
+
+	st_estring3,
+};
+
+
+int phase1::process(unsigned char c, int st) {
+
+	const unsigned char esc = 0xb6;
+
+
+	if (c == '\r' || c == '\n') {
+		switch (st) {
+		case st_text:
+		case st_comment:
+		default: // will error later.
+			flush();
+			multiline = false;
+			line++;
+			return st_text;
+
+		case st_text_esc:
+		case st_vstring_esc:
+		case st_dstring_esc:
+		case st_sstring_esc:
+		case st_estring1_esc:
+		case st_estring2_esc:
+			multiline = true;
+			scratch.pop_back();
+			line++;
+			return st - 1;
+		}
+	}
+
+	if (st != st_comment) scratch.push_back(c);
+
+	switch(st) {
+
+		case st_text:
+text:
+			switch(c) {
+				case '#':
+					scratch.pop_back();
+					return st_comment;
+				case esc:
+					return st_text_esc;
+				case '{':
+					return st_vstring;
+				case '"':
+					return st_dstring;
+				case '\'':
+					return st_sstring;
+				case '`':
+					return st_estring;
+
+				default:
+					return st_text;
+			}
+			break;
+
+		case st_comment:
+			return st;
+			break;
+
+		case st_text_esc:
+		case st_dstring_esc:
+		case st_estring1_esc:
+		case st_estring2_esc:
+			return st-1;
+			break;
+
+
+		case st_sstring_esc:
+			// fall through
+		case st_sstring:
+			if (c == '\'') return st_text;
+			if (c == esc) return st_sstring_esc;
+			return st_sstring;
+			break;
+
+		case st_dstring:
+			if (c == '\"') return st_text;
+			if (c == esc) return st_dstring_esc;
+			return st_dstring;
+			break;
+
+		case st_vstring_esc:
+			// fall through			
+		case st_vstring:
+			// '{' var '}' or '{{' var '}}'
+			// don't care if {{ or { at this point. A single } terminates.
+			if (c == '}') return st_text;
+			if (c == esc) return st_vstring_esc;
+			return st_vstring;
+
+		case st_estring:
+			// ``...`` or `...`
+			if (c == '`') return st_estring2;
+			// fall through.
+		case st_estring1:
+			if (c == '`') return st_text;
+			if (c == esc) return st_estring1_esc;
+			return st_estring1;
+
+		case st_estring2:
+			if (c == '`') return st_estring3;
+			if (c == esc) return st_estring2_esc;
+			return st_estring2;
+
+		case st_estring3:
+			if (c == '`') return st_text;
+			// error! handled later.
+			goto text;
+
+			break;
+
+	}
+	assert(!"unknown state");
+}
+
+
+void phase1::process(const std::string &s, bool final) {
+	
+	for (auto c : s) {
+		cs = process(c, cs);
+	}
+	if (final) finish();
+}
+
+void phase1::process(const unsigned char *begin, const unsigned char *end, bool final) {
+	while (begin != end) {
+		cs = process(*begin++, cs);
+	}
+	if (final) finish();
+}
+
+void phase1::finish() {
+	
+	cs = process('\n', cs);
+	flush();
+}
+
+void phase1::reset() {
+	cs = st_text;
+	multiline = false;
+	line = 1;
+	scratch.clear();
+}
+
+void phase1::flush() {
+	multiline = false;
+	if (scratch.empty()) return;
+	// strip trailing whitespace?
+	if (pipe_to) pipe_to(std::move(scratch));
+	scratch.clear();
+}
diff --git a/phase1.h b/phase1.h
index b9ffbe3..e1995d4 100644
--- a/phase1.h
+++ b/phase1.h
@@ -10,7 +10,7 @@ class phase1 {
 public:
 	typedef std::function<void(std::string &&)> pipe_function;
 
-	phase1();
+	phase1() = default;
 
 	void process(const unsigned char *begin, const unsigned char *end, bool final = false);
 
@@ -18,11 +18,12 @@ public:
 		process((const unsigned char *)begin, (const unsigned char *)end, final);
 	}
 
-	void process(const std::string &s, bool final = false) { process(s.data(), s.data() + s.size(), final); }
+	void process(const std::string &s, bool final = false);// { process(s.data(), s.data() + s.size(), final); }
 
-	void finish() { const char *tmp = "\n"; process(tmp, tmp+1, true); }
+	void finish();// { const char *tmp = "\n"; process(tmp, tmp+1, true); }
 
 	void reset();
+	void abort() { reset(); }
 
 
 	phase1 &operator >>= (pipe_function f) { pipe_to = f; return *this; }
@@ -35,14 +36,18 @@ public:
 		return *this;
 	}
 
-	void abort() { reset(); }
 
 
 private:
+
+	int process(unsigned char, int);
+	void flush();
+
 	std::string scratch;
 	pipe_function pipe_to;
 	int line = 1;
 	int cs = 0;
+	bool multiline = false;
 };
 
 #endif