diff --git a/Cargo.lock b/Cargo.lock
index 656317f8..07adda27 100644
--- a/Cargo.lock
+++ b/Cargo.lock
@@ -1402,7 +1402,7 @@ dependencies = [
 [[package]]
 name = "cosmic-config"
 version = "0.1.0"
-source = "git+https://github.com/pop-os/libcosmic#7151638f519941d8439ad0ee05723c39ed561941"
+source = "git+https://github.com/pop-os/libcosmic#ce56237ab9ea2aa7777656a32c9c28e2a38fc6c7"
 dependencies = [
  "atomicwrites",
  "cosmic-config-derive",
@@ -1424,7 +1424,7 @@ dependencies = [
 [[package]]
 name = "cosmic-config-derive"
 version = "0.1.0"
-source = "git+https://github.com/pop-os/libcosmic#7151638f519941d8439ad0ee05723c39ed561941"
+source = "git+https://github.com/pop-os/libcosmic#ce56237ab9ea2aa7777656a32c9c28e2a38fc6c7"
 dependencies = [
  "quote",
  "syn 1.0.109",
@@ -1502,7 +1502,7 @@ dependencies = [
 [[package]]
 name = "cosmic-panel-config"
 version = "0.1.0"
-source = "git+https://github.com/pop-os/cosmic-panel#af73ac840b72cfe760c4b6e3747fc19d611367e1"
+source = "git+https://github.com/pop-os/cosmic-panel#36a8e558ea326383821bf50f2bbc5f45c9f41aff"
 dependencies = [
  "anyhow",
  "cosmic-config",
@@ -1566,7 +1566,7 @@ dependencies = [
 [[package]]
 name = "cosmic-text"
 version = "0.14.2"
-source = "git+https://github.com/pop-os/cosmic-text.git#b017d7c856aed4b1a3ef0952df75d02d889a1f7b"
+source = "git+https://github.com/pop-os/cosmic-text.git#987ff45ff20f3cee1322e2f2909ac4c2c26f8321"
 dependencies = [
  "bitflags 2.9.0",
  "fontdb 0.23.0",
@@ -1588,7 +1588,7 @@ dependencies = [
 [[package]]
 name = "cosmic-theme"
 version = "0.1.0"
-source = "git+https://github.com/pop-os/libcosmic#7151638f519941d8439ad0ee05723c39ed561941"
+source = "git+https://github.com/pop-os/libcosmic#ce56237ab9ea2aa7777656a32c9c28e2a38fc6c7"
 dependencies = [
  "almost",
  "cosmic-config",
@@ -1660,9 +1660,9 @@ checksum = "42aaeae719fd78ce501d77c6cdf01f7e96f26bcd5617a4903a1c2b97e388543a"
 
 [[package]]
 name = "csscolorparser"
-version = "0.7.0"
+version = "0.7.1"
 source = "registry+https://github.com/rust-lang/crates.io-index"
-checksum = "46f9a16a848a7fb95dd47ce387ac1ee9a6df879ba784b815537fcd388a1a8288"
+checksum = "148247664b27bf6bf5041b46cf1e8c4872f70e75e3281348deb88abd75c915ab"
 dependencies = [
  "phf",
  "serde",
@@ -2918,7 +2918,7 @@ dependencies = [
 [[package]]
 name = "iced"
 version = "0.14.0-dev"
-source = "git+https://github.com/pop-os/libcosmic#7151638f519941d8439ad0ee05723c39ed561941"
+source = "git+https://github.com/pop-os/libcosmic#ce56237ab9ea2aa7777656a32c9c28e2a38fc6c7"
 dependencies = [
  "dnd",
  "iced_accessibility",
@@ -2936,7 +2936,7 @@ dependencies = [
 [[package]]
 name = "iced_accessibility"
 version = "0.1.0"
-source = "git+https://github.com/pop-os/libcosmic#7151638f519941d8439ad0ee05723c39ed561941"
+source = "git+https://github.com/pop-os/libcosmic#ce56237ab9ea2aa7777656a32c9c28e2a38fc6c7"
 dependencies = [
  "accesskit",
  "accesskit_winit",
@@ -2945,7 +2945,7 @@ dependencies = [
 [[package]]
 name = "iced_core"
 version = "0.14.0-dev"
-source = "git+https://github.com/pop-os/libcosmic#7151638f519941d8439ad0ee05723c39ed561941"
+source = "git+https://github.com/pop-os/libcosmic#ce56237ab9ea2aa7777656a32c9c28e2a38fc6c7"
 dependencies = [
  "bitflags 2.9.0",
  "bytes",
@@ -2969,7 +2969,7 @@ dependencies = [
 [[package]]
 name = "iced_futures"
 version = "0.14.0-dev"
-source = "git+https://github.com/pop-os/libcosmic#7151638f519941d8439ad0ee05723c39ed561941"
+source = "git+https://github.com/pop-os/libcosmic#ce56237ab9ea2aa7777656a32c9c28e2a38fc6c7"
 dependencies = [
  "futures",
  "iced_core",
@@ -2995,7 +2995,7 @@ dependencies = [
 [[package]]
 name = "iced_graphics"
 version = "0.14.0-dev"
-source = "git+https://github.com/pop-os/libcosmic#7151638f519941d8439ad0ee05723c39ed561941"
+source = "git+https://github.com/pop-os/libcosmic#ce56237ab9ea2aa7777656a32c9c28e2a38fc6c7"
 dependencies = [
  "bitflags 2.9.0",
  "bytemuck",
@@ -3017,7 +3017,7 @@ dependencies = [
 [[package]]
 name = "iced_renderer"
 version = "0.14.0-dev"
-source = "git+https://github.com/pop-os/libcosmic#7151638f519941d8439ad0ee05723c39ed561941"
+source = "git+https://github.com/pop-os/libcosmic#ce56237ab9ea2aa7777656a32c9c28e2a38fc6c7"
 dependencies = [
  "iced_graphics",
  "iced_tiny_skia",
@@ -3029,7 +3029,7 @@ dependencies = [
 [[package]]
 name = "iced_runtime"
 version = "0.14.0-dev"
-source = "git+https://github.com/pop-os/libcosmic#7151638f519941d8439ad0ee05723c39ed561941"
+source = "git+https://github.com/pop-os/libcosmic#ce56237ab9ea2aa7777656a32c9c28e2a38fc6c7"
 dependencies = [
  "bytes",
  "cosmic-client-toolkit",
@@ -3044,7 +3044,7 @@ dependencies = [
 [[package]]
 name = "iced_tiny_skia"
 version = "0.14.0-dev"
-source = "git+https://github.com/pop-os/libcosmic#7151638f519941d8439ad0ee05723c39ed561941"
+source = "git+https://github.com/pop-os/libcosmic#ce56237ab9ea2aa7777656a32c9c28e2a38fc6c7"
 dependencies = [
  "bytemuck",
  "cosmic-text",
@@ -3060,7 +3060,7 @@ dependencies = [
 [[package]]
 name = "iced_wgpu"
 version = "0.14.0-dev"
-source = "git+https://github.com/pop-os/libcosmic#7151638f519941d8439ad0ee05723c39ed561941"
+source = "git+https://github.com/pop-os/libcosmic#ce56237ab9ea2aa7777656a32c9c28e2a38fc6c7"
 dependencies = [
  "as-raw-xcb-connection",
  "bitflags 2.9.0",
@@ -3091,12 +3091,13 @@ dependencies = [
 [[package]]
 name = "iced_widget"
 version = "0.14.0-dev"
-source = "git+https://github.com/pop-os/libcosmic#7151638f519941d8439ad0ee05723c39ed561941"
+source = "git+https://github.com/pop-os/libcosmic#ce56237ab9ea2aa7777656a32c9c28e2a38fc6c7"
 dependencies = [
  "cosmic-client-toolkit",
  "dnd",
  "iced_renderer",
  "iced_runtime",
+ "log",
  "num-traits",
  "once_cell",
  "ouroboros",
@@ -3109,7 +3110,7 @@ dependencies = [
 [[package]]
 name = "iced_winit"
 version = "0.14.0-dev"
-source = "git+https://github.com/pop-os/libcosmic#7151638f519941d8439ad0ee05723c39ed561941"
+source = "git+https://github.com/pop-os/libcosmic#ce56237ab9ea2aa7777656a32c9c28e2a38fc6c7"
 dependencies = [
  "cosmic-client-toolkit",
  "dnd",
@@ -3835,7 +3836,7 @@ checksum = "d750af042f7ef4f724306de029d18836c26c1765a54a6a3f094cbd23a7267ffa"
 [[package]]
 name = "libcosmic"
 version = "0.1.0"
-source = "git+https://github.com/pop-os/libcosmic#7151638f519941d8439ad0ee05723c39ed561941"
+source = "git+https://github.com/pop-os/libcosmic#ce56237ab9ea2aa7777656a32c9c28e2a38fc6c7"
 dependencies = [
  "apply",
  "ashpd 0.9.2",
@@ -7476,7 +7477,7 @@ dependencies = [
 [[package]]
 name = "xdg-shell-wrapper-config"
 version = "0.1.0"
-source = "git+https://github.com/pop-os/cosmic-panel#af73ac840b72cfe760c4b6e3747fc19d611367e1"
+source = "git+https://github.com/pop-os/cosmic-panel#36a8e558ea326383821bf50f2bbc5f45c9f41aff"
 dependencies = [
  "serde",
  "wayland-protocols-wlr",
diff --git a/cosmic-app-list/src/app.rs b/cosmic-app-list/src/app.rs
index 075ad927..b831d42e 100755
--- a/cosmic-app-list/src/app.rs
+++ b/cosmic-app-list/src/app.rs
@@ -19,7 +19,6 @@ use cctk::{
         workspace::v1::client::ext_workspace_handle_v1::ExtWorkspaceHandleV1,
     },
 };
-use cosmic::desktop::fde;
 use cosmic::desktop::fde::{get_languages_from_env, DesktopEntry};
 use cosmic::{
     app,
@@ -50,6 +49,7 @@ use cosmic::{
     },
     Apply, Element, Task,
 };
+use cosmic::{desktop::fde, widget};
 use cosmic_app_list_config::{AppListConfig, APP_ID};
 use cosmic_protocols::toplevel_info::v1::client::zcosmic_toplevel_handle_v1::State;
 use futures::future::pending;
@@ -76,6 +76,8 @@ struct AppletIconData {
     padding: Padding,
 }
 
+static DND_FAVORITES: u64 = u64::MAX;
+
 impl AppletIconData {
     fn new(applet: &Context) -> Self {
         let icon_size = applet.suggested_size(false).0;
@@ -364,7 +366,7 @@ enum Message {
     StartDrag(u32),
     DragFinished,
     DndEnter(f64, f64),
-    DndExit,
+    DndLeave,
     DndMotion(f64, f64),
     DndDropFinished,
     DndData(Option<DndPathBuf>),
@@ -962,8 +964,7 @@ impl cosmic::Application for CosmicAppList {
                     o.preview_index = index;
                 }
             }
-            Message::DndExit => {
-                // remove the preview and restore to original list
+            Message::DndLeave => {
                 let mut cnt = 0;
                 if let Some((_, ref toplevel_group, _, pinned_pos)) = self.dnd_source.as_ref() {
                     let mut pos = 0;
@@ -1676,7 +1677,8 @@ impl cosmic::Application for CosmicAppList {
                 DndDestination::for_data::<DndPathBuf>(
                     row(favorites).spacing(app_icon.icon_spacing),
                     |_, _| Message::DndDropFinished,
-                ),
+                )
+                .drag_id(DND_FAVORITES.clone()),
                 row(active).spacing(app_icon.icon_spacing).into(),
                 container(vertical_rule(1))
                     .height(Length::Fill)
@@ -1690,7 +1692,8 @@ impl cosmic::Application for CosmicAppList {
                 DndDestination::for_data(
                     column(favorites).spacing(app_icon.icon_spacing),
                     |_data: Option<DndPathBuf>, _| Message::DndDropFinished,
-                ),
+                )
+                .drag_id(DND_FAVORITES.clone()),
                 column(active).spacing(app_icon.icon_spacing).into(),
                 container(divider::horizontal::default())
                     .width(Length::Fill)
@@ -1702,7 +1705,7 @@ impl cosmic::Application for CosmicAppList {
         let favorites = favorites
             .on_enter(|x, y, _| Message::DndEnter(x, y))
             .on_motion(Message::DndMotion)
-            .on_leave(|| Message::DndExit);
+            .on_leave(|| Message::DndLeave);
 
         let show_pinned =
             !self.pinned_list.is_empty() || self.dnd_offer.is_some() || self.is_listening_for_dnd;