diff -u -b -B --minimal make-cvs-orig/file.c make-cvs-patched/file.c
--- make-cvs-orig/file.c	2004-05-16 19:19:57.000000000 -0500
+++ make-cvs-patched/file.c	2004-09-17 13:38:46.000000000 -0500
@@ -455,8 +455,9 @@
     for (d = f->deps; d != 0; d = d->next)
       for (f2 = d->file; f2 != 0; f2 = f2->prev)
 	{
-	  /* Mark this file as phony and nonexistent.  */
+	  /* Mark this file as phony nonexistent target.  */
 	  f2->phony = 1;
+          f2->is_target = 1;
 	  f2->last_mtime = NONEXISTENT_MTIME;
 	  f2->mtime_before_update = NONEXISTENT_MTIME;
 	}
diff -u -b -B --minimal make-cvs-orig/implicit.c make-cvs-patched/implicit.c
--- make-cvs-orig/implicit.c	2004-01-07 21:17:08.000000000 -0600
+++ make-cvs-patched/implicit.c	2004-09-17 13:41:17.000000000 -0500
@@ -342,6 +342,8 @@
 	  deps_found = 0;
 	  for (dep = rule->deps; dep != 0; dep = dep->next)
 	    {
+              struct file *f = 0;
+              
 	      /* If the dependency name has a %, substitute the stem.  */
 	      p = strchr (dep_name (dep), '%');
 	      if (p != 0)
@@ -396,7 +398,7 @@
 		 directory (the one gotten by prepending FILENAME's directory),
 		 so it might actually exist.  */
 
-	      if (lookup_file (p) != 0
+	      if (((f = lookup_file (p)) != 0 && f->is_target)
 		  || ((!dep->changed || check_lastslash) && file_exists_p (p)))
 		{
 		  found_files_im[deps_found] = dep->ignore_mtime;