A folder can be thought of as a location on your hard disk or floppy disk. Folders used to be called directories/subdirectories. A folder contains files and can contain nested folders (subfolders). Folders and subfolders are used to organize your hard disk. For example, you probably already have a folder named "My Documents" on your hard disk; you could place a subfolder named "Work" under "My Documents", and place all your work documents within this subfolder. This way, you can keep your work documents separate from your personal documents.