Last year at the ECDL 2004 conference, we reported some initial progress and experiences developing DSpace as an open source community-driven project [8], particularly as seen from an institutional manager’s viewpoint. We also described some challenges and issues. This paper describes the progress in addressing some of those issues, and developments in the DSpace open source community. We go into detail about the processes and infrastructure we have developed around the DSpace code base, in the hope that this will be useful to other projects and organisations exploring the possibilities of becoming involved in or transitioning to open source development of digital library software. Some new challenges the DSpace community faces, particularly in the area of addressing required system architecture changes, are introduced. We also describe some exciting new possibilities that open source development brings to our community.