diff --git a/reactos/apps/tests/wm_erasebkgnd/BACKBITMAP.BMP b/reactos/apps/tests/wm_erasebkgnd/BACKBITMAP.BMP
new file mode 100644
index 00000000000..38bc9716b64
Binary files /dev/null and b/reactos/apps/tests/wm_erasebkgnd/BACKBITMAP.BMP differ
diff --git a/reactos/apps/tests/wm_erasebkgnd/Demo_WM_ERASEBKGND.cpp b/reactos/apps/tests/wm_erasebkgnd/Demo_WM_ERASEBKGND.cpp
new file mode 100644
index 00000000000..582673f06bf
--- /dev/null
+++ b/reactos/apps/tests/wm_erasebkgnd/Demo_WM_ERASEBKGND.cpp
@@ -0,0 +1,175 @@
+
+// ------------------------------------------------------------------
+// Windows 2000 Graphics API Black Book
+// Chapter 2 - CD-ROM (WM_ERASEBKGND Demo)
+//
+// Created by Damon Chandler <dmc27@ee.cornell.edu>
+// Updates can be downloaded at: <www.coriolis.com>
+//
+// Please do not hesistate to e-mail me at dmc27@ee.cornell.edu 
+// if you have any questions about this code.
+// ------------------------------------------------------------------
+
+//*********************************************************//
+//                                                         // 
+// SYNOPSIS:                                               //
+//   This sample project demonstrates how to render        //
+//   a background image in response to the WM_ERASEBKGND   //
+//   message.  It also shows how to create a transparent   //
+//   static (text) control by handling the                 //
+//   WM_CTLCOLORSTATIC message.                            //
+//                                                         // 
+//*********************************************************//
+
+
+//>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
+#include <windows.h>
+//<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<
+
+
+HINSTANCE HInst;
+const char* WndClassName = "GMainWnd";
+LRESULT CALLBACK MainWndProc(HWND HWnd, UINT Msg, WPARAM WParam, 
+   LPARAM LParam);
+
+
+int APIENTRY WinMain(HINSTANCE HInstance, HINSTANCE HPrevInstance,
+    LPTSTR lpCmdLine, int nCmdShow)
+{
+   HInst = HInstance;
+
+   WNDCLASS wc;
+   memset(&wc, 0, sizeof(WNDCLASS));
+    
+   wc.style = CS_VREDRAW | CS_HREDRAW | CS_DBLCLKS;
+   wc.lpfnWndProc = MainWndProc;
+   wc.hInstance = HInstance;
+   wc.hCursor = LoadCursor(NULL, IDC_ARROW);
+   wc.hbrBackground = 
+      reinterpret_cast<HBRUSH>(COLOR_BTNFACE + 1);
+   wc.lpszClassName = WndClassName;
+
+   if (RegisterClass(&wc))
+   {
+      HWND HWnd = 
+         CreateWindow(WndClassName, 
+                      TEXT("WM_ERASEBKGND Demo"),
+                      WS_OVERLAPPEDWINDOW | WS_CAPTION | 
+                      WS_VISIBLE | WS_CLIPSIBLINGS,
+                      CW_USEDEFAULT, CW_USEDEFAULT, 205, 85,
+                      NULL, NULL, HInstance, NULL);
+                                 
+      if (HWnd)
+      {
+         ShowWindow(HWnd, nCmdShow);
+         UpdateWindow(HWnd);
+
+         MSG msg;
+         while (GetMessage(&msg, NULL, 0, 0))
+         {
+             TranslateMessage(&msg);
+             DispatchMessage(&msg);
+         }      
+      }
+    }
+    return 0;
+}
+//------------------------------------------------------------------
+
+
+// static text and bitmap-related variables
+HWND HStatic;
+HDC HMemDC;
+HBITMAP HBmp, HOldBmp;
+const char* filename = "BACKBITMAP.BMP";
+
+LRESULT CALLBACK MainWndProc(HWND HWnd, UINT Msg, WPARAM WParam, 
+   LPARAM LParam)
+{
+   switch (Msg)
+   {
+      case WM_CREATE:
+      {
+         HStatic = 
+            CreateWindow(TEXT("STATIC"), TEXT("Static Text"), 
+                         WS_CHILD | WS_VISIBLE | SS_CENTER, 
+                         10, 20, 175, 30, 
+                         HWnd, NULL, HInst, NULL);
+
+         // create a memory DC compatible with the screen
+         HMemDC = CreateCompatibleDC(NULL);
+         if (HMemDC)
+         {
+            // load a DDB from file
+            HBmp = static_cast<HBITMAP>(
+               LoadImage(HInst, filename, IMAGE_BITMAP, 
+                         0, 0, LR_LOADFROMFILE)
+               );
+            if (HBmp)
+            {
+               // associate the DDB with the memory DC
+               HOldBmp = static_cast<HBITMAP>(
+                  SelectObject(HMemDC, HBmp)
+                  );
+            }
+         }
+      }
+      case WM_CTLCOLORSTATIC:
+      {
+         if (reinterpret_cast<HWND>(LParam) == HStatic)
+         {
+            HDC HStaticDC = reinterpret_cast<HDC>(WParam);
+            SetBkMode(HStaticDC, TRANSPARENT);
+
+            return reinterpret_cast<LRESULT>(
+               GetStockObject(NULL_BRUSH)
+               );
+         }
+         break;
+      }
+      case WM_ERASEBKGND:
+      {
+         BITMAP bmp;
+         if (GetObject(HBmp, sizeof(BITMAP), &bmp))
+         {
+            RECT RClient;
+            GetClientRect(HWnd, &RClient);
+
+            HDC Hdc = reinterpret_cast<HDC>(WParam); 
+            SetStretchBltMode(Hdc, COLORONCOLOR);
+            
+            //
+            // TODO: add palette handling code for 
+            // palettized displays (see Chapter 9)...
+            //
+
+            // render the background image            
+            StretchBlt(Hdc, 0, 0, 
+                       RClient.right - RClient.left,
+                       RClient.bottom - RClient.top,
+                       HMemDC, 0, 0, bmp.bmWidth, bmp.bmHeight, 
+                       SRCCOPY);
+            return TRUE;
+         }
+         break;
+      }
+      case WM_DESTROY:
+      {
+         if (HBmp)
+         {
+            // free the bitmap
+            DeleteObject(SelectObject(HMemDC, HOldBmp));
+         }
+         // free the memory DC
+         DeleteDC(HMemDC);
+
+         PostQuitMessage(0);
+         return 0;
+      }
+   }
+   return DefWindowProc(HWnd, Msg, WParam, LParam);
+}
+//------------------------------------------------------------------
+
+
+
diff --git a/reactos/apps/tests/wm_erasebkgnd/makefile b/reactos/apps/tests/wm_erasebkgnd/makefile
new file mode 100644
index 00000000000..5c6818c00c1
--- /dev/null
+++ b/reactos/apps/tests/wm_erasebkgnd/makefile
@@ -0,0 +1,66 @@
+# Makefile - Proj_Demo_WM_ERASEBKGND.dsp
+
+ifndef CFG
+CFG=Proj_Demo_WM_ERASEBKGND - Win32 Debug
+endif
+CC=gcc
+CFLAGS=
+CXX=g++
+CXXFLAGS=$(CFLAGS)
+RC=windres -O COFF
+ifeq "$(CFG)"  "Proj_Demo_WM_ERASEBKGND - Win32 Release"
+CFLAGS+=-fexceptions -O2 -DWIN32 -DNDEBUG -D_WINDOWS -D_MBCS -W
+LD=$(CXX) $(CXXFLAGS)
+LDFLAGS=
+LDFLAGS+=-Wl,--subsystem,windows
+LIBS+=-lkernel32 -luser32 -lgdi32
+else
+ifeq "$(CFG)"  "Proj_Demo_WM_ERASEBKGND - Win32 Debug"
+CFLAGS+=-fexceptions -g -O0 -DWIN32 -D_DEBUG -D_WINDOWS -D_MBCS -W
+LD=$(CXX) $(CXXFLAGS)
+LDFLAGS=
+LDFLAGS+=-Wl,--subsystem,windows
+LIBS+=-lkernel32 -luser32 -lgdi32
+endif
+endif
+
+ifndef TARGET
+TARGET=WM_ERASEBKGND.exe
+endif
+
+.PHONY: all
+all: $(TARGET)
+
+%.o: %.c
+	$(CC) $(CFLAGS) $(CPPFLAGS) -o $@ -c $<
+
+%.o: %.cpp
+	$(CXX) $(CXXFLAGS) $(CPPFLAGS) -o $@ -c $<
+
+%.res: %.rc
+	$(RC) $(CPPFLAGS) -o $@ -i $<
+
+SOURCE_FILES= \
+	Demo_WM_ERASEBKGND.cpp
+
+HEADER_FILES=
+
+RESOURCE_FILES=
+
+SRCS=$(SOURCE_FILES) $(HEADER_FILES) $(RESOURCE_FILES) 
+
+OBJS=$(patsubst %.rc,%.res,$(patsubst %.cpp,%.o,$(patsubst %.c,%.o,$(filter %.c %.cpp %.rc,$(SRCS)))))
+
+$(TARGET): $(OBJS)
+	$(LD) $(LDFLAGS) -o $@ $(OBJS) $(LIBS)
+
+.PHONY: clean
+clean:
+	del $(OBJS) $(TARGET) Proj_Demo_WM_ERASEBKGND.dep
+
+.PHONY: depends
+depends:
+	-$(CXX) $(CXXFLAGS) $(CPPFLAGS) -MM $(filter %.c %.cpp,$(SRCS)) > Proj_Demo_WM_ERASEBKGND.dep
+
+-include Proj_Demo_WM_ERASEBKGND.dep
+