diff --git a/public/java/src/org/broadinstitute/sting/gatk/walkers/indels/IndelRealigner.java b/public/java/src/org/broadinstitute/sting/gatk/walkers/indels/IndelRealigner.java
index 36e4db1c5..41fa755b8 100755
--- a/public/java/src/org/broadinstitute/sting/gatk/walkers/indels/IndelRealigner.java
+++ b/public/java/src/org/broadinstitute/sting/gatk/walkers/indels/IndelRealigner.java
@@ -138,7 +138,7 @@ public class IndelRealigner extends ReadWalker<Integer, Integer> {
      * Any number of VCF files representing known indels to be used for constructing alternate consenses.
      * Could be e.g. dbSNP and/or official 1000 Genomes indel calls.  Non-indel variants in these files will be ignored.
      */
-    @Input(fullName="known", shortName = "known", doc="Input VCF file(s) with known indels", required=false)
+    @Input(fullName="knownAlleles", shortName = "known", doc="Input VCF file(s) with known indels", required=false)
     public List<RodBinding<VariantContext>> known = Collections.emptyList();
 
     /**
diff --git a/public/java/src/org/broadinstitute/sting/gatk/walkers/indels/RealignerTargetCreator.java b/public/java/src/org/broadinstitute/sting/gatk/walkers/indels/RealignerTargetCreator.java
index bede50a0b..56ce60449 100755
--- a/public/java/src/org/broadinstitute/sting/gatk/walkers/indels/RealignerTargetCreator.java
+++ b/public/java/src/org/broadinstitute/sting/gatk/walkers/indels/RealignerTargetCreator.java
@@ -50,6 +50,7 @@ import java.io.PrintStream;
 import java.util.ArrayList;
 import java.util.Collections;
 import java.util.List;
+import java.util.TreeSet;
 
 /**
  * Emits intervals for the Local Indel Realigner to target for realignment.
@@ -103,7 +104,7 @@ import java.util.List;
 @Allows(value={DataSource.READS, DataSource.REFERENCE})
 @By(DataSource.REFERENCE)
 @BAQMode(ApplicationTime = BAQ.ApplicationTime.FORBIDDEN)
-public class RealignerTargetCreator extends RodWalker<RealignerTargetCreator.Event, RealignerTargetCreator.Event> {
+public class RealignerTargetCreator extends RodWalker<RealignerTargetCreator.Event, RealignerTargetCreator.EventPair> implements TreeReducible<RealignerTargetCreator.EventPair> {
 
     /**
      * The target intervals for realignment.
@@ -251,43 +252,125 @@ public class RealignerTargetCreator extends RodWalker<RealignerTargetCreator.Eve
         return new Event(eventLoc, furthestStopPos, eventType);
     }
 
-    public void onTraversalDone(Event sum) {
-        if ( sum != null && sum.isReportableEvent() )
-            out.println(sum.toString());
+    public void onTraversalDone(EventPair sum) {
+        if ( sum.left != null && sum.left.isReportableEvent() )
+            sum.intervals.add(sum.left.getLoc());
+        if ( sum.right != null && sum.right.isReportableEvent() )
+            sum.intervals.add(sum.right.getLoc());
+
+        for ( GenomeLoc loc : sum.intervals )
+            out.println(loc);
     }
 
-    public Event reduceInit() {
-        return null;
+    public EventPair reduceInit() {
+        return new EventPair(null, null);
     }
 
-    public Event reduce(Event value, Event sum) {
-        // ignore no new events
-        if ( value == null )
-            return sum;
+    public EventPair treeReduce(EventPair lhs, EventPair rhs) {
+        EventPair result;
 
-        // if it's the first good value, use it
-        if ( sum == null )
-            return value;
+        if ( lhs.left == null ) {
+            result = rhs;
+        } else if ( rhs.left == null ) {
+            result = lhs;
+        } else if ( lhs.right == null ) {
+            if ( rhs.right == null ) {
+                if ( canBeMerged(lhs.left, rhs.left) )
+                    result = new EventPair(mergeEvents(lhs.left, rhs.left), null, lhs.intervals, rhs.intervals);
+                else
+                    result = new EventPair(lhs.left, rhs.left, lhs.intervals, rhs.intervals);
+            } else {
+                if ( canBeMerged(lhs.left, rhs.left) )
+                    result = new EventPair(mergeEvents(lhs.left, rhs.left), rhs.right, lhs.intervals, rhs.intervals);
+                else {
+                    if ( rhs.left.isReportableEvent() )
+                        rhs.intervals.add(rhs.left.getLoc());
+                    result = new EventPair(lhs.left, rhs.right, lhs.intervals, rhs.intervals);
+                }
+            }
+        } else if ( rhs.right == null ) {
+            if ( canBeMerged(lhs.right, rhs.left) )
+                result = new EventPair(lhs.left, mergeEvents(lhs.right, rhs.left), lhs.intervals, rhs.intervals);
+            else {
+                if ( lhs.right.isReportableEvent() )
+                    lhs.intervals.add(lhs.right.getLoc());
+                result = new EventPair(lhs.left, rhs.left, lhs.intervals, rhs.intervals);
+            }
+        } else {
+            if ( canBeMerged(lhs.right, rhs.left) ) {
+                Event merge = mergeEvents(lhs.right, rhs.left);
+                if ( merge.isReportableEvent() )
+                    lhs.intervals.add(merge.getLoc());
+            } else {
+                if ( lhs.right.isReportableEvent() )
+                    lhs.intervals.add(lhs.right.getLoc());
+                if ( rhs.left.isReportableEvent() )
+                    rhs.intervals.add(rhs.left.getLoc());
+            }
 
-        // if we hit a new contig or they have no overlapping reads, then they are separate events - so clear sum
-        if ( sum.loc.getContigIndex() != value.loc.getContigIndex() || sum.furthestStopPos < value.loc.getStart() ) {
-            if ( sum.isReportableEvent() )
-                out.println(sum.toString());
-            return value;
+            result = new EventPair(lhs.left, rhs.right, lhs.intervals, rhs.intervals);
+        }
+
+        return result;
+    }
+
+    public EventPair reduce(Event value, EventPair sum) {
+        if ( value == null ) {
+            ; // do nothing
+        } else if ( sum.left == null ) {
+            sum.left = value;
+        } else if ( sum.right == null ) {
+            if ( canBeMerged(sum.left, value) )
+                sum.left = mergeEvents(sum.left, value);
+            else
+                sum.right = value;
+        } else {
+            if ( canBeMerged(sum.right, value) )
+                sum.right = mergeEvents(sum.right, value);
+            else {
+                if ( sum.right.isReportableEvent() )
+                    sum.intervals.add(sum.right.getLoc());
+                sum.right = value;
+            }
         }
 
-        // otherwise, merge the two events
-        sum.merge(value);
         return sum;
     }
 
+    static private boolean canBeMerged(Event left, Event right) {
+        return left.loc.getContigIndex() == right.loc.getContigIndex() && left.furthestStopPos >= right.loc.getStart();
+    }
+
+    @com.google.java.contract.Requires({"left != null", "right != null"})
+    static private Event mergeEvents(Event left, Event right) {
+        left.merge(right);
+        return left;
+    }
+
     private enum EVENT_TYPE { POINT_EVENT, INDEL_EVENT, BOTH }
 
+    class EventPair {
+        public Event left, right;
+        public TreeSet<GenomeLoc> intervals = new TreeSet<GenomeLoc>();
+
+        public EventPair(Event left, Event right) {
+            this.left = left;
+            this.right = right;
+        }
+
+        public EventPair(Event left, Event right, TreeSet<GenomeLoc> set1, TreeSet<GenomeLoc> set2) {
+            this.left = left;
+            this.right = right;
+            intervals.addAll(set1);
+            intervals.addAll(set2);
+        }
+    }
+
     class Event {
         public int furthestStopPos;
 
-        public GenomeLoc loc;
-        public int eventStartPos;
+        private GenomeLoc loc;
+        private int eventStartPos;
         private int eventStopPos;
         private EVENT_TYPE type;
         private ArrayList<Integer> pointEvents = new ArrayList<Integer>();
@@ -332,6 +415,10 @@ public class RealignerTargetCreator extends RodWalker<RealignerTargetCreator.Eve
                             eventStartPos = lastPosition;
                         else
                             eventStartPos = Math.min(eventStartPos, lastPosition);
+                    } else if ( eventStartPos == -1 && e.eventStartPos != -1 ) {
+                        eventStartPos = e.eventStartPos;
+                        eventStopPos = e.eventStopPos;
+                        furthestStopPos = e.furthestStopPos;
                     }
                 }
                 pointEvents.add(newPosition);
@@ -342,8 +429,8 @@ public class RealignerTargetCreator extends RodWalker<RealignerTargetCreator.Eve
             return getToolkit().getGenomeLocParser().isValidGenomeLoc(loc.getContig(), eventStartPos, eventStopPos, true) && eventStopPos >= 0 && eventStopPos - eventStartPos < maxIntervalSize;
         }
 
-        public String toString() {
-            return String.format("%s:%d-%d", loc.getContig(), eventStartPos, eventStopPos);
+        public GenomeLoc getLoc() {
+            return getToolkit().getGenomeLocParser().createGenomeLoc(loc.getContig(), eventStartPos, eventStopPos);
         }
     }
 }
\ No newline at end of file
diff --git a/public/java/test/org/broadinstitute/sting/BaseTest.java b/public/java/test/org/broadinstitute/sting/BaseTest.java
index 35a81770d..8e11add33 100755
--- a/public/java/test/org/broadinstitute/sting/BaseTest.java
+++ b/public/java/test/org/broadinstitute/sting/BaseTest.java
@@ -80,7 +80,8 @@ public abstract class BaseTest {
     public static final String networkTempDir = "/broad/shptmp/";
     public static final File networkTempDirFile = new File(networkTempDir);
 
-    public static final String testDir = "public/testdata/";
+    public static final File testDirFile = new File("public/testdata/");
+    public static final String testDir = testDirFile.getAbsolutePath() + "/";
 
     /** before the class starts up */
     static {
diff --git a/public/java/test/org/broadinstitute/sting/gatk/walkers/indels/RealignerTargetCreatorIntegrationTest.java b/public/java/test/org/broadinstitute/sting/gatk/walkers/indels/RealignerTargetCreatorIntegrationTest.java
index 1873ccbe2..78b24d646 100755
--- a/public/java/test/org/broadinstitute/sting/gatk/walkers/indels/RealignerTargetCreatorIntegrationTest.java
+++ b/public/java/test/org/broadinstitute/sting/gatk/walkers/indels/RealignerTargetCreatorIntegrationTest.java
@@ -8,20 +8,41 @@ import java.util.Arrays;
 public class RealignerTargetCreatorIntegrationTest extends WalkerTest {
 
     @Test
-    public void testIntervals() {
+    public void testIntervals1() {
+        String md5 = "3f0b63a393104d0c4158c7d1538153b8";
 
         WalkerTest.WalkerTestSpec spec1 = new WalkerTest.WalkerTestSpec(
                 "-T RealignerTargetCreator -R " + b36KGReference + " -I " + validationDataLocation + "NA12878.1kg.p2.chr1_10mb_11_mb.SLX.bam --mismatchFraction 0.15 -L 1:10,000,000-10,050,000 -o %s",
                  1,
-                 Arrays.asList("e7accfa58415d6da80383953b1a3a986"));
-        executeTest("test standard", spec1);
+                 Arrays.asList(md5));
+        executeTest("test standard nt=1", spec1);
 
         WalkerTest.WalkerTestSpec spec2 = new WalkerTest.WalkerTestSpec(
-                "-T RealignerTargetCreator --known " + b36dbSNP129 + " -R " + b36KGReference + " -I " + validationDataLocation + "NA12878.1kg.p2.chr1_10mb_11_mb.SLX.bam -L 1:10,000,000-10,050,000 -o %s",
+                "-nt 4 -T RealignerTargetCreator -R " + b36KGReference + " -I " + validationDataLocation + "NA12878.1kg.p2.chr1_10mb_11_mb.SLX.bam --mismatchFraction 0.15 -L 1:10,000,000-10,050,000 -o %s",
                  1,
-                 Arrays.asList("0367d39a122c8ac0899fb868a82ef728"));
-        executeTest("test dbsnp", spec2);
+                 Arrays.asList(md5));
+        executeTest("test standard nt=4", spec2);
+    }
 
+    @Test
+    public void testIntervals2() {
+        String md5 = "e0f745b79b679c225314a2abef4919ff";
+
+        WalkerTest.WalkerTestSpec spec1 = new WalkerTest.WalkerTestSpec(
+                "-T RealignerTargetCreator --known " + b36dbSNP129 + " -R " + b36KGReference + " -I " + validationDataLocation + "NA12878.1kg.p2.chr1_10mb_11_mb.SLX.bam -L 1:10,000,000-10,200,000 -o %s",
+                 1,
+                 Arrays.asList(md5));
+        executeTest("test with dbsnp nt=1", spec1);
+
+        WalkerTest.WalkerTestSpec spec2 = new WalkerTest.WalkerTestSpec(
+                "-nt 4 -T RealignerTargetCreator --known " + b36dbSNP129 + " -R " + b36KGReference + " -I " + validationDataLocation + "NA12878.1kg.p2.chr1_10mb_11_mb.SLX.bam -L 1:10,000,000-10,200,000 -o %s",
+                 1,
+                 Arrays.asList(md5));
+        executeTest("test with dbsnp nt=4", spec2);
+    }
+
+    @Test
+    public void testKnownsOnly() {
         WalkerTest.WalkerTestSpec spec3 = new WalkerTest.WalkerTestSpec(
                 "-T RealignerTargetCreator -R " + b36KGReference + " --known " + validationDataLocation + "NA12878.chr1_10mb_11mb.slx.indels.vcf4 -BTI known -o %s",
                  1,