diff --git a/dlls/winedos/dosexe.h b/dlls/winedos/dosexe.h
index 19f601a2a58..9e90dc76b19 100644
--- a/dlls/winedos/dosexe.h
+++ b/dlls/winedos/dosexe.h
@@ -264,6 +264,9 @@ void DOSVM_BuildCallFrame( CONTEXT86 *, DOSRELAY, LPVOID );
 extern void SB_ioport_out( WORD port, BYTE val );
 extern BYTE SB_ioport_in( WORD port );
 
+/* timer.c */
+extern void WINAPI DOSVM_Int08Handler(CONTEXT86*);
+
 /* xms.c */
 extern void WINAPI XMS_Handler(CONTEXT86*);
 
diff --git a/dlls/winedos/interrupts.c b/dlls/winedos/interrupts.c
index 52b4cdb07b1..11973836fa8 100644
--- a/dlls/winedos/interrupts.c
+++ b/dlls/winedos/interrupts.c
@@ -45,7 +45,7 @@ static const INTPROC DOSVM_VectorsBuiltin[] =
 {
   /* 00 */ 0,                  0,                  0,                  0,
   /* 04 */ 0,                  0,                  0,                  0,
-  /* 08 */ 0,                  DOSVM_Int09Handler, 0,                  0,
+  /* 08 */ DOSVM_Int08Handler, DOSVM_Int09Handler, 0,                  0,
   /* 0C */ 0,                  0,                  0,                  0,
   /* 10 */ DOSVM_Int10Handler, DOSVM_Int11Handler, DOSVM_Int12Handler, DOSVM_Int13Handler,
   /* 14 */ 0,                  DOSVM_Int15Handler, DOSVM_Int16Handler, DOSVM_Int17Handler,
diff --git a/dlls/winedos/module.c b/dlls/winedos/module.c
index f8b92dca91c..0ed2584d9a0 100644
--- a/dlls/winedos/module.c
+++ b/dlls/winedos/module.c
@@ -152,37 +152,6 @@ static void MZ_FillPSP( LPVOID lpPSP, LPCSTR cmdtail, int length )
     /* FIXME: more PSP stuff */
 }
 
-/* default INT 08 handler: increases timer tick counter but not much more */
-static char int08[]={
- 0xCD,0x1C,           /* int $0x1c */
- 0x50,                /* pushw %ax */
- 0x1E,                /* pushw %ds */
- 0xB8,0x40,0x00,      /* movw $0x40,%ax */
- 0x8E,0xD8,           /* movw %ax,%ds */
-#if 0
- 0x83,0x06,0x6C,0x00,0x01, /* addw $1,(0x6c) */
- 0x83,0x16,0x6E,0x00,0x00, /* adcw $0,(0x6e) */
-#else
- 0x66,0xFF,0x06,0x6C,0x00, /* incl (0x6c) */
-#endif
- 0xB0,0x20,           /* movb $0x20,%al */
- 0xE6,0x20,           /* outb %al,$0x20 */
- 0x1F,                /* popw %ax */
- 0x58,                /* popw %ax */
- 0xCF                 /* iret */
-};
-
-static void MZ_InitHandlers(void)
-{
- WORD seg;
- LPBYTE start = DOSVM_AllocCodeUMB( sizeof(int08), &seg, 0 );
- memcpy(start,int08,sizeof(int08));
-/* INT 08: point it at our tick-incrementing handler */
- ((SEGPTR*)0)[0x08]=MAKESEGPTR(seg,0);
-/* INT 1C: just point it to IRET, we don't want to handle it ourselves */
- ((SEGPTR*)0)[0x1C]=MAKESEGPTR(seg,sizeof(int08)-1);
-}
-
 static WORD MZ_InitEnvironment( LPCSTR env, LPCSTR name )
 {
  unsigned sz=0;
@@ -213,7 +182,6 @@ static BOOL MZ_InitMemory(void)
     DOSMEM_Init(TRUE);
     DOSDEV_InstallDOSDevices();
 
-    MZ_InitHandlers();
     return TRUE;
 }
 
diff --git a/dlls/winedos/timer.c b/dlls/winedos/timer.c
index c1fda0c6373..37a038568cf 100644
--- a/dlls/winedos/timer.c
+++ b/dlls/winedos/timer.c
@@ -124,3 +124,44 @@ void WINAPI DOSVM_SetTimer( UINT ticks )
     if (!DOSVM_IsWin16())
         MZ_RunInThread( TIMER_DoSetTimer, ticks );
 }
+
+
+/***********************************************************************
+ *              DOSVM_Int08Handler
+ *
+ * DOS interrupt 08h handler (IRQ0 - TIMER).
+ */
+void WINAPI DOSVM_Int08Handler( CONTEXT86 *context )
+{
+    BIOSDATA *bios_data      = BIOS_DATA;
+    CONTEXT86 nested_context = *context;
+    FARPROC16 int1c_proc     = DOSVM_GetRMHandler( 0x1c );
+    
+    nested_context.SegCs = SELECTOROF(int1c_proc);
+    nested_context.Eip   = OFFSETOF(int1c_proc);
+
+    /*
+     * Update BIOS ticks since midnight.
+     *
+     * FIXME: What to do when number of ticks exceeds ticks per day?
+     */
+    bios_data->Ticks++;
+
+    /*
+     * If IRQ is called from protected mode, convert
+     * context into VM86 context. Stack is invalidated so
+     * that DPMI_CallRMProc allocates a new stack.
+     */
+    if (!ISV86(&nested_context))
+    {
+        nested_context.EFlags |= V86_FLAG;
+        nested_context.SegSs = 0;
+    }
+
+    /*
+     * Call interrupt 0x1c.
+     */
+    DPMI_CallRMProc( &nested_context, NULL, 0, TRUE );
+
+    DOSVM_AcknowledgeIRQ( context );
+}