diff --git a/component.json b/component.json
index 3db3bd410..38fff1b39 100644
--- a/component.json
+++ b/component.json
@@ -18,7 +18,6 @@
     "src/api/global.js",
     "src/api/lifecycle.js",
     "src/batcher.js",
-    "src/binding.js",
     "src/cache.js",
     "src/compiler/compile.js",
     "src/compiler/transclude.js",
@@ -53,6 +52,7 @@
     "src/instance/init.js",
     "src/instance/scope.js",
     "src/observer/array.js",
+    "src/observer/dep.js",
     "src/observer/index.js",
     "src/observer/object.js",
     "src/parsers/directive.js",
diff --git a/src/api/lifecycle.js b/src/api/lifecycle.js
index 70a85db52..ff6806d37 100644
--- a/src/api/lifecycle.js
+++ b/src/api/lifecycle.js
@@ -125,7 +125,6 @@ function cleanup (vm) {
   vm.$parent =
   vm.$root =
   vm._children =
-  vm._bindings =
   vm._directives = null
   // call the last hook...
   vm._isDestroyed = true
diff --git a/src/instance/scope.js b/src/instance/scope.js
index 87e4c5a28..ef3c09e12 100644
--- a/src/instance/scope.js
+++ b/src/instance/scope.js
@@ -1,6 +1,6 @@
 var _ = require('../util')
 var Observer = require('../observer')
-var Binding = require('../binding')
+var Dep = require('../observer/dep')
 
 /**
  * Setup the scope of an instance, which contains:
@@ -197,20 +197,20 @@ exports._initMeta = function () {
  */
 
 exports._defineMeta = function (key, value) {
-  var binding = new Binding()
+  var dep = new Dep()
   Object.defineProperty(this, key, {
     enumerable: true,
     configurable: true,
     get: function metaGetter () {
       if (Observer.target) {
-        Observer.target.addDep(binding)
+        Observer.target.addDep(dep)
       }
       return value
     },
     set: function metaSetter (val) {
       if (val !== value) {
         value = val
-        binding.notify()
+        dep.notify()
       }
     }
   })
diff --git a/src/binding.js b/src/observer/dep.js
similarity index 82%
rename from src/binding.js
rename to src/observer/dep.js
index b272b3f99..28a5f4e1d 100644
--- a/src/binding.js
+++ b/src/observer/dep.js
@@ -1,18 +1,18 @@
 var uid = 0
 
 /**
- * A binding is an observable that can have multiple
+ * A dep is an observable that can have multiple
  * directives subscribing to it.
  *
  * @constructor
  */
 
-function Binding () {
+function Dep () {
   this.id = ++uid
   this.subs = []
 }
 
-var p = Binding.prototype
+var p = Dep.prototype
 
 /**
  * Add a directive subscriber.
@@ -47,4 +47,4 @@ p.notify = function () {
   }
 }
 
-module.exports = Binding
\ No newline at end of file
+module.exports = Dep
\ No newline at end of file
diff --git a/src/observer/index.js b/src/observer/index.js
index 50dc08420..4fe54994b 100644
--- a/src/observer/index.js
+++ b/src/observer/index.js
@@ -1,6 +1,6 @@
 var _ = require('../util')
 var config = require('../config')
-var Binding = require('../binding')
+var Dep = require('./dep')
 var arrayMethods = require('./array')
 var arrayKeys = Object.getOwnPropertyNames(arrayMethods)
 require('./object')
@@ -58,7 +58,7 @@ function Observer (value, type) {
   this.id = ++uid
   this.value = value
   this.active = true
-  this.bindings = []
+  this.deps = []
   _.define(value, '__ob__', this)
   if (type === ARRAY) {
     var augment = config.proto && _.hasProto
@@ -126,10 +126,10 @@ p.walk = function (obj) {
 
 /**
  * Try to carete an observer for a child value,
- * and if value is array, link binding to the array.
+ * and if value is array, link dep to the array.
  *
  * @param {*} val
- * @return {Binding|undefined}
+ * @return {Dep|undefined}
  */
 
 p.observe = function (val) {
@@ -160,9 +160,9 @@ p.observeArray = function (items) {
 p.convert = function (key, val) {
   var ob = this
   var childOb = ob.observe(val)
-  var binding = new Binding()
+  var dep = new Dep()
   if (childOb) {
-    childOb.bindings.push(binding)
+    childOb.deps.push(dep)
   }
   Object.defineProperty(ob.value, key, {
     enumerable: true,
@@ -171,40 +171,40 @@ p.convert = function (key, val) {
       // Observer.target is a watcher whose getter is
       // currently being evaluated.
       if (ob.active && Observer.target) {
-        Observer.target.addDep(binding)
+        Observer.target.addDep(dep)
       }
       return val
     },
     set: function (newVal) {
       if (newVal === val) return
-      // remove binding from old value
+      // remove dep from old value
       var oldChildOb = val && val.__ob__
       if (oldChildOb) {
-        var oldBindings = oldChildOb.bindings
-        oldBindings.splice(oldBindings.indexOf(binding), 1)
+        var oldDeps = oldChildOb.deps
+        oldDeps.splice(oldDeps.indexOf(dep), 1)
       }
       val = newVal
-      // add binding to new value
+      // add dep to new value
       var newChildOb = ob.observe(newVal)
       if (newChildOb) {
-        newChildOb.bindings.push(binding)
+        newChildOb.deps.push(dep)
       }
-      binding.notify()
+      dep.notify()
     }
   })
 }
 
 /**
- * Notify change on all self bindings on an observer.
+ * Notify change on all self deps on an observer.
  * This is called when a mutable value mutates. e.g.
  * when an Array's mutating methods are called, or an
  * Object's $add/$delete are called.
  */
 
 p.notify = function () {
-  var bindings = this.bindings
-  for (var i = 0, l = bindings.length; i < l; i++) {
-    bindings[i].notify()
+  var deps = this.deps
+  for (var i = 0, l = deps.length; i < l; i++) {
+    deps[i].notify()
   }
 }
 
diff --git a/src/watcher.js b/src/watcher.js
index b38ce4700..562a033cc 100644
--- a/src/watcher.js
+++ b/src/watcher.js
@@ -46,18 +46,18 @@ function Watcher (vm, expression, cb, filters, needSet, deep) {
 var p = Watcher.prototype
 
 /**
- * Add a binding dependency to this directive.
+ * Add a dependency to this directive.
  *
- * @param {Binding} binding
+ * @param {Dep} dep
  */
 
-p.addDep = function (binding) {
-  var id = binding.id
+p.addDep = function (dep) {
+  var id = dep.id
   if (!this.newDeps[id]) {
-    this.newDeps[id] = binding
+    this.newDeps[id] = dep
     if (!this.deps[id]) {
-      this.deps[id] = binding
-      binding.addSub(this)
+      this.deps[id] = dep
+      dep.addSub(this)
     }
   }
 }
diff --git a/test/unit/specs/api/lifecycle_spec.js b/test/unit/specs/api/lifecycle_spec.js
index 7cbd1a663..fcc0a06a6 100644
--- a/test/unit/specs/api/lifecycle_spec.js
+++ b/test/unit/specs/api/lifecycle_spec.js
@@ -168,7 +168,6 @@ if (_.inBrowser) {
         expect(vm.$parent).toBeNull()
         expect(vm.$root).toBeNull()
         expect(vm._children).toBeNull()
-        expect(vm._bindings).toBeNull()
         expect(vm._directives).toBeNull()
         expect(Object.keys(vm._events).length).toBe(0)
       })
diff --git a/test/unit/specs/binding_spec.js b/test/unit/specs/binding_spec.js
deleted file mode 100644
index 6388f3419..000000000
--- a/test/unit/specs/binding_spec.js
+++ /dev/null
@@ -1,34 +0,0 @@
-var Binding = require('../../../src/binding')
-
-describe('Binding', function () {
-
-  var b
-  beforeEach(function () {
-    b = new Binding()
-  })
-
-  it('addSub', function () {
-    var sub = {}
-    b.addSub(sub)
-    expect(b.subs.length).toBe(1)
-    expect(b.subs.indexOf(sub)).toBe(0)
-  })
-
-  it('removeSub', function () {
-    var sub = {}
-    b.addSub(sub)
-    b.removeSub(sub)
-    expect(b.subs.length).toBe(0)
-    expect(b.subs.indexOf(sub)).toBe(-1)
-  })
-
-  it('notify', function () {
-    var sub = {
-      update: jasmine.createSpy('sub')
-    }
-    b.addSub(sub)
-    b.notify()
-    expect(sub.update).toHaveBeenCalled()
-  })
-
-})
\ No newline at end of file
diff --git a/test/unit/specs/compile/compile_spec.js b/test/unit/specs/compiler/compile_spec.js
similarity index 100%
rename from test/unit/specs/compile/compile_spec.js
rename to test/unit/specs/compiler/compile_spec.js
diff --git a/test/unit/specs/compile/transclude_spec.js b/test/unit/specs/compiler/transclude_spec.js
similarity index 100%
rename from test/unit/specs/compile/transclude_spec.js
rename to test/unit/specs/compiler/transclude_spec.js
diff --git a/test/unit/specs/filters_spec.js b/test/unit/specs/filters/filters_spec.js
similarity index 98%
rename from test/unit/specs/filters_spec.js
rename to test/unit/specs/filters/filters_spec.js
index 2791d1f0c..044551806 100644
--- a/test/unit/specs/filters_spec.js
+++ b/test/unit/specs/filters/filters_spec.js
@@ -1,5 +1,5 @@
-var Vue = require('../../../src/vue')
-var filters = require('../../../src/filters')
+var Vue = require('../../../../src/vue')
+var filters = require('../../../../src/filters')
 
 describe('Filters', function () {
 
diff --git a/test/unit/specs/observer/dep_spec.js b/test/unit/specs/observer/dep_spec.js
new file mode 100644
index 000000000..c150be7ef
--- /dev/null
+++ b/test/unit/specs/observer/dep_spec.js
@@ -0,0 +1,34 @@
+var Dep = require('../../../../src/observer/dep')
+
+describe('Dep', function () {
+
+  var d
+  beforeEach(function () {
+    d = new Dep()
+  })
+
+  it('addSub', function () {
+    var sub = {}
+    d.addSub(sub)
+    expect(d.subs.length).toBe(1)
+    expect(d.subs.indexOf(sub)).toBe(0)
+  })
+
+  it('removeSub', function () {
+    var sub = {}
+    d.addSub(sub)
+    d.removeSub(sub)
+    expect(d.subs.length).toBe(0)
+    expect(d.subs.indexOf(sub)).toBe(-1)
+  })
+
+  it('notify', function () {
+    var sub = {
+      update: jasmine.createSpy('sub')
+    }
+    d.addSub(sub)
+    d.notify()
+    expect(sub.update).toHaveBeenCalled()
+  })
+
+})
\ No newline at end of file
diff --git a/test/unit/specs/observer_spec.js b/test/unit/specs/observer/observer_spec.js
similarity index 73%
rename from test/unit/specs/observer_spec.js
rename to test/unit/specs/observer/observer_spec.js
index eccff5a7b..a393a0bad 100644
--- a/test/unit/specs/observer_spec.js
+++ b/test/unit/specs/observer/observer_spec.js
@@ -1,7 +1,7 @@
-var Observer = require('../../../src/observer')
-var config = require('../../../src/config')
-var Binding = require('../../../src/binding')
-var _ = require('../../../src/util')
+var Observer = require('../../../../src/observer')
+var config = require('../../../../src/config')
+var Dep = require('../../../../src/observer/dep')
+var _ = require('../../../../src/util')
 
 describe('Observer', function () {
 
@@ -57,9 +57,9 @@ describe('Observer', function () {
     // mock a watcher!
     var watcher = {
       deps: [],
-      addDep: function (binding) {
-        this.deps.push(binding)
-        binding.addSub(this)
+      addDep: function (dep) {
+        this.deps.push(dep)
+        dep.addSub(this)
       },
       update: jasmine.createSpy()
     }
@@ -75,8 +75,8 @@ describe('Observer', function () {
     var oldA = obj.a
     obj.a = { b: 4 }
     expect(watcher.update.calls.count()).toBe(2)
-    expect(oldA.__ob__.bindings.length).toBe(0)
-    expect(obj.a.__ob__.bindings.length).toBe(1)
+    expect(oldA.__ob__.deps.length).toBe(0)
+    expect(obj.a.__ob__.deps.length).toBe(1)
     // recollect dep
     var oldDeps = watcher.deps
     watcher.deps = []
@@ -92,22 +92,22 @@ describe('Observer', function () {
   it('observing $add/$delete', function () {
     var obj = { a: 1 }
     var ob = Observer.create(obj)
-    var binding = new Binding()
-    ob.bindings.push(binding)
-    spyOn(binding, 'notify')
+    var dep = new Dep()
+    ob.deps.push(dep)
+    spyOn(dep, 'notify')
     obj.$add('b', 2)
     expect(obj.b).toBe(2)
-    expect(binding.notify.calls.count()).toBe(1)
+    expect(dep.notify.calls.count()).toBe(1)
     obj.$delete('a')
     expect(obj.hasOwnProperty('a')).toBe(false)
-    expect(binding.notify.calls.count()).toBe(2)
+    expect(dep.notify.calls.count()).toBe(2)
     // should ignore adding an existing key
     obj.$add('b', 3)
     expect(obj.b).toBe(2)
-    expect(binding.notify.calls.count()).toBe(2)
+    expect(dep.notify.calls.count()).toBe(2)
     // should ignore deleting non-existing key
     obj.$delete('a')
-    expect(binding.notify.calls.count()).toBe(2)
+    expect(dep.notify.calls.count()).toBe(2)
     // should work on non-observed objects
     var obj2 = { a: 1 }
     obj2.$delete('a')
@@ -117,9 +117,9 @@ describe('Observer', function () {
   it('observing array mutation', function () {
     var arr = []
     var ob = Observer.create(arr)
-    var binding = new Binding()
-    ob.bindings.push(binding)
-    spyOn(binding, 'notify')
+    var dep = new Dep()
+    ob.deps.push(dep)
+    spyOn(dep, 'notify')
     var objs = [{}, {}, {}]
     arr.push(objs[0])
     arr.pop()
@@ -128,7 +128,7 @@ describe('Observer', function () {
     arr.splice(0, 0, objs[2])
     arr.sort()
     arr.reverse()
-    expect(binding.notify.calls.count()).toBe(7)
+    expect(dep.notify.calls.count()).toBe(7)
     // inserted elements should be observed
     objs.forEach(function (obj) {
       expect(obj.__ob__ instanceof Observer).toBe(true)
@@ -138,16 +138,16 @@ describe('Observer', function () {
   it('array $set', function () {
     var arr = [1]
     var ob = Observer.create(arr)
-    var binding = new Binding()
-    ob.bindings.push(binding)
-    spyOn(binding, 'notify')
+    var dep = new Dep()
+    ob.deps.push(dep)
+    spyOn(dep, 'notify')
     arr.$set(0, 2)
     expect(arr[0]).toBe(2)
-    expect(binding.notify.calls.count()).toBe(1)
+    expect(dep.notify.calls.count()).toBe(1)
     // setting out of bound index
     arr.$set(2, 3)
     expect(arr[2]).toBe(3)
-    expect(binding.notify.calls.count()).toBe(2)
+    expect(dep.notify.calls.count()).toBe(2)
   })
 
   it('array $remove', function () {
@@ -155,23 +155,23 @@ describe('Observer', function () {
     var obj1 = arr[0]
     var obj2 = arr[1]
     var ob = Observer.create(arr)
-    var binding = new Binding()
-    ob.bindings.push(binding)
-    spyOn(binding, 'notify')
+    var dep = new Dep()
+    ob.deps.push(dep)
+    spyOn(dep, 'notify')
     // remove by index
     arr.$remove(0)
     expect(arr.length).toBe(1)
     expect(arr[0]).toBe(obj2)
-    expect(binding.notify.calls.count()).toBe(1)
+    expect(dep.notify.calls.count()).toBe(1)
     // remove by identity, not in array
     arr.$remove(obj1)
     expect(arr.length).toBe(1)
     expect(arr[0]).toBe(obj2)
-    expect(binding.notify.calls.count()).toBe(1)
+    expect(dep.notify.calls.count()).toBe(1)
     // remove by identity, in array
     arr.$remove(obj2)
     expect(arr.length).toBe(0)
-    expect(binding.notify.calls.count()).toBe(2)
+    expect(dep.notify.calls.count()).toBe(2)
   })
 
   it('no proto', function () {
@@ -181,22 +181,22 @@ describe('Observer', function () {
     var ob = Observer.create(obj)
     expect(obj.$add).toBeTruthy()
     expect(obj.$delete).toBeTruthy()
-    var binding = new Binding()
-    ob.bindings.push(binding)
-    spyOn(binding, 'notify')
+    var dep = new Dep()
+    ob.deps.push(dep)
+    spyOn(dep, 'notify')
     obj.$add('b', 2)
-    expect(binding.notify).toHaveBeenCalled()
+    expect(dep.notify).toHaveBeenCalled()
     // array
     var arr = [1, 2, 3]
     var ob2 = Observer.create(arr)
     expect(arr.$set).toBeTruthy()
     expect(arr.$remove).toBeTruthy()
     expect(arr.push).not.toBe([].push)
-    var binding2 = new Binding()
-    ob2.bindings.push(binding2)
-    spyOn(binding2, 'notify')
+    var dep2 = new Dep()
+    ob2.deps.push(dep2)
+    spyOn(dep2, 'notify')
     arr.push(1)
-    expect(binding2.notify).toHaveBeenCalled()
+    expect(dep2.notify).toHaveBeenCalled()
     config.proto = true
   })
 
diff --git a/test/unit/specs/parse/directive_spec.js b/test/unit/specs/parsers/directive_spec.js
similarity index 100%
rename from test/unit/specs/parse/directive_spec.js
rename to test/unit/specs/parsers/directive_spec.js
diff --git a/test/unit/specs/parse/expression_spec.js b/test/unit/specs/parsers/expression_spec.js
similarity index 100%
rename from test/unit/specs/parse/expression_spec.js
rename to test/unit/specs/parsers/expression_spec.js
diff --git a/test/unit/specs/parse/path_spec.js b/test/unit/specs/parsers/path_spec.js
similarity index 100%
rename from test/unit/specs/parse/path_spec.js
rename to test/unit/specs/parsers/path_spec.js
diff --git a/test/unit/specs/parse/template_spec.js b/test/unit/specs/parsers/template_spec.js
similarity index 100%
rename from test/unit/specs/parse/template_spec.js
rename to test/unit/specs/parsers/template_spec.js
diff --git a/test/unit/specs/parse/text_spec.js b/test/unit/specs/parsers/text_spec.js
similarity index 100%
rename from test/unit/specs/parse/text_spec.js
rename to test/unit/specs/parsers/text_spec.js
diff --git a/test/unit/specs/transition_spec.js b/test/unit/specs/transition/transition_spec.js
similarity index 98%
rename from test/unit/specs/transition_spec.js
rename to test/unit/specs/transition/transition_spec.js
index e5c15cb7a..0cf51661d 100644
--- a/test/unit/specs/transition_spec.js
+++ b/test/unit/specs/transition/transition_spec.js
@@ -1,6 +1,6 @@
-var Vue = require('../../../src/vue')
-var _ = require('../../../src/util')
-var transition = require('../../../src/transition')
+var Vue = require('../../../../src/vue')
+var _ = require('../../../../src/util')
+var transition = require('../../../../src/transition')
 
 if (_.inBrowser && !_.isIE9) {
   describe('Transition', function () {