diff --git a/.env.example b/.env.example
index 876a95b..57e874a 100644
--- a/.env.example
+++ b/.env.example
@@ -7,7 +7,7 @@ TZ=UTC
 # Copy this file to .env and customize
 
 # Image version to run (set by build.sh, or use 'latest')
-JAMA_VERSION=0.7.8
+JAMA_VERSION=0.7.9
 
 # Default admin credentials (used on FIRST RUN only)
 ADMIN_NAME=Admin User
diff --git a/backend/package.json b/backend/package.json
index 946c1d0..4a9511e 100644
--- a/backend/package.json
+++ b/backend/package.json
@@ -1,6 +1,6 @@
 {
   "name": "jama-backend",
-  "version": "0.7.8",
+  "version": "0.7.9",
   "description": "TeamChat backend server",
   "main": "src/index.js",
   "scripts": {
diff --git a/build.sh b/build.sh
index 43d53e0..7d1e33f 100644
--- a/build.sh
+++ b/build.sh
@@ -13,7 +13,7 @@
 # ─────────────────────────────────────────────────────────────
 set -euo pipefail
 
-VERSION="${1:-0.7.8}"
+VERSION="${1:-0.7.9}"
 ACTION="${2:-}"
 REGISTRY="${REGISTRY:-}"
 IMAGE_NAME="jama"
diff --git a/frontend/package.json b/frontend/package.json
index 4864008..de8567c 100644
--- a/frontend/package.json
+++ b/frontend/package.json
@@ -1,6 +1,6 @@
 {
   "name": "jama-frontend",
-  "version": "0.7.8",
+  "version": "0.7.9",
   "private": true,
   "scripts": {
     "dev": "vite",
diff --git a/frontend/src/components/Sidebar.jsx b/frontend/src/components/Sidebar.jsx
index 2549322..375101e 100644
--- a/frontend/src/components/Sidebar.jsx
+++ b/frontend/src/components/Sidebar.jsx
@@ -82,16 +82,15 @@ export default function Sidebar({ groups, activeGroupId, onSelectGroup, notifica
   ];
 
   const publicFiltered = allGroups.filter(g => g.type === 'public');
-  const dms = allGroups
-    .filter(g => g.type === 'private' && !!g.is_direct)
+  // All private groups (DMs + group chats) sorted together by most recent message
+  const privateFiltered = allGroups
+    .filter(g => g.type === 'private')
     .sort((a, b) => {
       if (!a.last_message_at && !b.last_message_at) return 0;
       if (!a.last_message_at) return 1;
       if (!b.last_message_at) return -1;
       return new Date(b.last_message_at) - new Date(a.last_message_at);
     });
-  const privateNonDM = allGroups.filter(g => g.type === 'private' && !g.is_direct);
-  const privateFiltered = [...privateNonDM, ...dms];
 
   const getNotifCount = (groupId) => notifications.filter(n => n.groupId === groupId).length;
 
@@ -176,7 +175,7 @@ export default function Sidebar({ groups, activeGroupId, onSelectGroup, notifica
         )}
         {privateFiltered.length > 0 && (
           <div className="group-section">
-            <div className="section-label">DIRECT MESSAGES</div>
+            <div className="section-label">MESSAGES</div>
             {privateFiltered.map(g => <GroupItem key={g.id} group={g} />)}
           </div>
         )}