diff --git a/progress.md b/progress.md
index 8dc5a8c..13b1f16 100644
--- a/progress.md
+++ b/progress.md
@@ -14,7 +14,7 @@ A remote desktop environment with a Rust (Actix) backend and Angular 21 frontend
 
 ## Checklist
 
-### Phase 1: Rust Backend ✅ (compiles)
+### Phase 1: Rust Backend ✅ (builds & runs)
 - [x] `server/Cargo.toml` — Dependencies: actix-web 4, actix-ws 0.4, actix-cors, dashmap, parking_lot, serde, uuid, chrono
 - [x] `server/src/main.rs` — Actix HTTP server with CORS, compression, static file serving, SPA fallback
 - [x] `server/src/config.rs` — Env-based config (BUTTERFLY_HOST, BUTTERFLY_PORT, etc.)
@@ -24,17 +24,22 @@ A remote desktop environment with a Rust (Actix) backend and Angular 21 frontend
 - [x] `server/src/ws/` — WebSocket handler: agent/viewer connect, display/audio frame relay, HUD forwarding, heartbeat timeout
 - [x] `server/src/stream/` — StreamStats tracker (frame count, byte relay, uptime)
 - [x] `server/static/index.html` — Placeholder loading page
-- [x] Compiles with `cargo check` (warnings only for future-use types)
+- [x] `cargo build` succeeds, `cargo check` clean (only dead_code warnings for future-use types)
 
-### Phase 2: Angular 21 Frontend 🔲 (next)
-- [ ] Project scaffold with Angular CLI
-- [ ] Windows-like desktop shell (taskbar, start menu, window manager)
-- [ ] Remote display component (WebSocket frame rendering)
-- [ ] Audio playback component
-- [ ] HUD overlay (mouse/keyboard forwarding)
-- [ ] Built-in apps: File Explorer, Terminal, Settings, Text Editor, Browser
+### Phase 2: Angular 21 Frontend ✅ (builds & serves)
+- [x] Project scaffold with Angular CLI 21
+- [x] Windows-like desktop shell (taskbar, start menu, window manager)
+- [x] Remote display component (WebSocket canvas frame rendering, FPS counter)
+- [x] HUD overlay (mouse click/move/wheel, keyboard down/up forwarding)
+- [x] Window Manager service (open, close, focus, minimize, maximize, drag, resize)
+- [x] WebSocket service (typed message streams, heartbeat, auto-reconnect)
+- [x] API service (health, sessions CRUD, HUD command forwarding)
+- [x] Built-in apps: File Explorer, Terminal, Text Editor, Settings, Web Browser
+- [x] Session picker dialog (create/connect to remote sessions)
+- [x] Production build: 328KB total (85KB gzipped), output to `dist/browser/`
+- [x] Dark theme with animated gradient desktop background
 
-### Phase 3: VM Agent Executable 🔲
+### Phase 3: VM Agent Executable 🔲 (next)
 - [ ] Rust desktop agent that captures display and audio
 - [ ] Streams display frames (JPEG/PNG) and audio (Opus/PCM) via WebSocket
 - [ ] Receives HUD commands (mouse, keyboard, resize)
@@ -48,17 +53,21 @@ A remote desktop environment with a Rust (Actix) backend and Angular 21 frontend
 - [ ] Performance optimization
 
 ## Recent Commits
-- `bae17ae` server: fix pong bytes reference — backend compiles
-- `2e55d5c` server: add .gitignore, fix compile errors
-- `0c35db1` server: main.rs — Actix entry point
-- `b2f4f7f` server: fix Cargo.toml dependency versions
-- `94a992d` server: api/sessions.rs — CRUD endpoints
-- `a0b834e` server: stream/ — StreamStats tracker
-- `74591a4` server: ws/handler.rs — WebSocket handler
-- `40bf516` server: api/health.rs
-- `843c7bb` server: api/mod.rs
-- `e00fbf4` server: ws/mod.rs
-- `ff476f1` server: state.rs — AppState
-- `fdde57c` server: config.rs
-- `5c8f848` server: models.rs
-- `bf8e9f7` server: Cargo.toml
+- `dcfaceb` desktop: production build works (328KB, 85KB gzip)
+- `f4b7e25` desktop: fix build errors (FormsModule, nativeWindow, provideHttpClient)
+- `8a9429c` desktop: components/desktop — main shell
+- `eea8197` desktop: components/apps/browser
+- `6beb93b` desktop: components/apps/settings
+- `0048eab` desktop: components/apps/file-explorer
+- `283e53d` desktop: components/apps/text-editor
+- `7496fbe` desktop: components/apps/terminal
+- `6b4c641` desktop: components/remote-display
+- `8ad129e` desktop: components/start-menu
+- `490317b` desktop: components/taskbar
+- `b5e23e1` desktop: components/window
+- `9d8aaa5` desktop: services/window-manager.service
+- `4041625` desktop: services/api.service
+- `710560d` desktop: services/websocket.service
+- `7991237` desktop: app root component
+- `2b05373` desktop: scaffold Angular 21 project
+- `bae17ae` server: fix pong bytes — backend compiles