diff --git a/cmd/collect_local.go b/cmd/collect_local.go
new file mode 100644
index 0000000..4e88a95
--- /dev/null
+++ b/cmd/collect_local.go
@@ -0,0 +1,333 @@
+package cmd
+
+import (
+	"fmt"
+	"io/fs"
+	"os"
+	"path/filepath"
+	"strings"
+
+	"github.com/Snider/Borg/pkg/compress"
+	"github.com/Snider/Borg/pkg/datanode"
+	"github.com/Snider/Borg/pkg/tim"
+	"github.com/Snider/Borg/pkg/trix"
+	"github.com/Snider/Borg/pkg/ui"
+
+	"github.com/spf13/cobra"
+)
+
+type CollectLocalCmd struct {
+	cobra.Command
+}
+
+// NewCollectLocalCmd creates a new collect local command
+func NewCollectLocalCmd() *CollectLocalCmd {
+	c := &CollectLocalCmd{}
+	c.Command = cobra.Command{
+		Use:   "local [directory]",
+		Short: "Collect files from a local directory",
+		Long: `Collect files from a local directory and store them in a DataNode.
+
+If no directory is specified, the current working directory is used.
+
+Examples:
+  borg collect local
+  borg collect local ./src
+  borg collect local /path/to/project --output project.tar
+  borg collect local . --format stim --password secret
+  borg collect local . --exclude "*.log" --exclude "node_modules"`,
+		Args: cobra.MaximumNArgs(1),
+		RunE: func(cmd *cobra.Command, args []string) error {
+			directory := "."
+			if len(args) > 0 {
+				directory = args[0]
+			}
+
+			outputFile, _ := cmd.Flags().GetString("output")
+			format, _ := cmd.Flags().GetString("format")
+			compression, _ := cmd.Flags().GetString("compression")
+			password, _ := cmd.Flags().GetString("password")
+			excludes, _ := cmd.Flags().GetStringSlice("exclude")
+			includeHidden, _ := cmd.Flags().GetBool("hidden")
+			respectGitignore, _ := cmd.Flags().GetBool("gitignore")
+
+			finalPath, err := CollectLocal(directory, outputFile, format, compression, password, excludes, includeHidden, respectGitignore)
+			if err != nil {
+				return err
+			}
+			fmt.Fprintln(cmd.OutOrStdout(), "Files saved to", finalPath)
+			return nil
+		},
+	}
+	c.Flags().String("output", "", "Output file for the DataNode")
+	c.Flags().String("format", "datanode", "Output format (datanode, tim, trix, or stim)")
+	c.Flags().String("compression", "none", "Compression format (none, gz, or xz)")
+	c.Flags().String("password", "", "Password for encryption (required for stim/trix format)")
+	c.Flags().StringSlice("exclude", nil, "Patterns to exclude (can be specified multiple times)")
+	c.Flags().Bool("hidden", false, "Include hidden files and directories")
+	c.Flags().Bool("gitignore", true, "Respect .gitignore files (default: true)")
+	return c
+}
+
+func init() {
+	collectCmd.AddCommand(&NewCollectLocalCmd().Command)
+}
+
+// CollectLocal collects files from a local directory into a DataNode
+func CollectLocal(directory string, outputFile string, format string, compression string, password string, excludes []string, includeHidden bool, respectGitignore bool) (string, error) {
+	// Validate format
+	if format != "datanode" && format != "tim" && format != "trix" && format != "stim" {
+		return "", fmt.Errorf("invalid format: %s (must be 'datanode', 'tim', 'trix', or 'stim')", format)
+	}
+	if (format == "stim" || format == "trix") && password == "" {
+		return "", fmt.Errorf("password is required for %s format", format)
+	}
+	if compression != "none" && compression != "gz" && compression != "xz" {
+		return "", fmt.Errorf("invalid compression: %s (must be 'none', 'gz', or 'xz')", compression)
+	}
+
+	// Resolve directory path
+	absDir, err := filepath.Abs(directory)
+	if err != nil {
+		return "", fmt.Errorf("error resolving directory path: %w", err)
+	}
+
+	info, err := os.Stat(absDir)
+	if err != nil {
+		return "", fmt.Errorf("error accessing directory: %w", err)
+	}
+	if !info.IsDir() {
+		return "", fmt.Errorf("not a directory: %s", absDir)
+	}
+
+	// Load gitignore patterns if enabled
+	var gitignorePatterns []string
+	if respectGitignore {
+		gitignorePatterns = loadGitignore(absDir)
+	}
+
+	// Create DataNode and collect files
+	dn := datanode.New()
+	var fileCount int
+
+	bar := ui.NewProgressBar(-1, "Scanning files")
+	defer bar.Finish()
+
+	err = filepath.WalkDir(absDir, func(path string, d fs.DirEntry, err error) error {
+		if err != nil {
+			return err
+		}
+
+		// Get relative path
+		relPath, err := filepath.Rel(absDir, path)
+		if err != nil {
+			return err
+		}
+
+		// Skip root
+		if relPath == "." {
+			return nil
+		}
+
+		// Skip hidden files/dirs unless explicitly included
+		if !includeHidden && isHidden(relPath) {
+			if d.IsDir() {
+				return filepath.SkipDir
+			}
+			return nil
+		}
+
+		// Check gitignore patterns
+		if respectGitignore && matchesGitignore(relPath, d.IsDir(), gitignorePatterns) {
+			if d.IsDir() {
+				return filepath.SkipDir
+			}
+			return nil
+		}
+
+		// Check exclude patterns
+		if matchesExclude(relPath, excludes) {
+			if d.IsDir() {
+				return filepath.SkipDir
+			}
+			return nil
+		}
+
+		// Skip directories (they're implicit in DataNode)
+		if d.IsDir() {
+			return nil
+		}
+
+		// Read file content
+		content, err := os.ReadFile(path)
+		if err != nil {
+			return fmt.Errorf("error reading %s: %w", relPath, err)
+		}
+
+		// Add to DataNode with forward slashes (tar convention)
+		dn.AddData(filepath.ToSlash(relPath), content)
+		fileCount++
+		bar.Describe(fmt.Sprintf("Collected %d files", fileCount))
+
+		return nil
+	})
+
+	if err != nil {
+		return "", fmt.Errorf("error walking directory: %w", err)
+	}
+
+	if fileCount == 0 {
+		return "", fmt.Errorf("no files found in %s", directory)
+	}
+
+	bar.Describe(fmt.Sprintf("Packaging %d files", fileCount))
+
+	// Convert to output format
+	var data []byte
+	if format == "tim" {
+		t, err := tim.FromDataNode(dn)
+		if err != nil {
+			return "", fmt.Errorf("error creating tim: %w", err)
+		}
+		data, err = t.ToTar()
+		if err != nil {
+			return "", fmt.Errorf("error serializing tim: %w", err)
+		}
+	} else if format == "stim" {
+		t, err := tim.FromDataNode(dn)
+		if err != nil {
+			return "", fmt.Errorf("error creating tim: %w", err)
+		}
+		data, err = t.ToSigil(password)
+		if err != nil {
+			return "", fmt.Errorf("error encrypting stim: %w", err)
+		}
+	} else if format == "trix" {
+		data, err = trix.ToTrix(dn, password)
+		if err != nil {
+			return "", fmt.Errorf("error serializing trix: %w", err)
+		}
+	} else {
+		data, err = dn.ToTar()
+		if err != nil {
+			return "", fmt.Errorf("error serializing DataNode: %w", err)
+		}
+	}
+
+	// Apply compression
+	compressedData, err := compress.Compress(data, compression)
+	if err != nil {
+		return "", fmt.Errorf("error compressing data: %w", err)
+	}
+
+	// Determine output filename
+	if outputFile == "" {
+		baseName := filepath.Base(absDir)
+		if baseName == "." || baseName == "/" {
+			baseName = "local"
+		}
+		outputFile = baseName + "." + format
+		if compression != "none" {
+			outputFile += "." + compression
+		}
+	}
+
+	err = os.WriteFile(outputFile, compressedData, 0644)
+	if err != nil {
+		return "", fmt.Errorf("error writing output file: %w", err)
+	}
+
+	return outputFile, nil
+}
+
+// isHidden checks if a path component starts with a dot
+func isHidden(path string) bool {
+	parts := strings.Split(filepath.ToSlash(path), "/")
+	for _, part := range parts {
+		if strings.HasPrefix(part, ".") {
+			return true
+		}
+	}
+	return false
+}
+
+// loadGitignore loads patterns from .gitignore if it exists
+func loadGitignore(dir string) []string {
+	var patterns []string
+
+	gitignorePath := filepath.Join(dir, ".gitignore")
+	content, err := os.ReadFile(gitignorePath)
+	if err != nil {
+		return patterns
+	}
+
+	lines := strings.Split(string(content), "\n")
+	for _, line := range lines {
+		line = strings.TrimSpace(line)
+		// Skip empty lines and comments
+		if line == "" || strings.HasPrefix(line, "#") {
+			continue
+		}
+		patterns = append(patterns, line)
+	}
+
+	return patterns
+}
+
+// matchesGitignore checks if a path matches any gitignore pattern
+func matchesGitignore(path string, isDir bool, patterns []string) bool {
+	for _, pattern := range patterns {
+		// Handle directory-only patterns
+		if strings.HasSuffix(pattern, "/") {
+			if !isDir {
+				continue
+			}
+			pattern = strings.TrimSuffix(pattern, "/")
+		}
+
+		// Handle negation (simplified - just skip negated patterns)
+		if strings.HasPrefix(pattern, "!") {
+			continue
+		}
+
+		// Match against path components
+		matched, _ := filepath.Match(pattern, filepath.Base(path))
+		if matched {
+			return true
+		}
+
+		// Also try matching the full path
+		matched, _ = filepath.Match(pattern, path)
+		if matched {
+			return true
+		}
+
+		// Handle ** patterns (simplified)
+		if strings.Contains(pattern, "**") {
+			simplePattern := strings.ReplaceAll(pattern, "**", "*")
+			matched, _ = filepath.Match(simplePattern, path)
+			if matched {
+				return true
+			}
+		}
+	}
+	return false
+}
+
+// matchesExclude checks if a path matches any exclude pattern
+func matchesExclude(path string, excludes []string) bool {
+	for _, pattern := range excludes {
+		// Match against basename
+		matched, _ := filepath.Match(pattern, filepath.Base(path))
+		if matched {
+			return true
+		}
+
+		// Match against full path
+		matched, _ = filepath.Match(pattern, path)
+		if matched {
+			return true
+		}
+	}
+	return false
+}
diff --git a/examples/demo-sample.smsg b/examples/demo-sample.smsg
deleted file mode 100644
index 7f77643..0000000
Binary files a/examples/demo-sample.smsg and /dev/null differ