diff --git a/.gitignore b/.gitignore
new file mode 100644
index 0000000..2d2b47d
--- /dev/null
+++ b/.gitignore
@@ -0,0 +1,2 @@
+.idea
+node_modules
\ No newline at end of file
diff --git a/.jshintrc b/.jshintrc
new file mode 100644
index 0000000..da3efbf
--- /dev/null
+++ b/.jshintrc
@@ -0,0 +1,91 @@
+{
+  // JSHint Default Configuration File (as on JSHint website)
+  // See http://jshint.com/docs/ for more details
+
+  "maxerr"        : 50,       // {int} Maximum error before stopping
+
+  // Enforcing
+  "bitwise"       : true,     // true: Prohibit bitwise operators (&, |, ^, etc.)
+  "camelcase"     : false,    // true: Identifiers must be in camelCase
+  "curly"         : false,     // true: Require {} for every new block or scope
+  "eqeqeq"        : true,     // true: Require triple equals (===) for comparison
+  "forin"         : true,     // true: Require filtering for..in loops with obj.hasOwnProperty()
+  "freeze"        : true,     // true: prohibits overwriting prototypes of native objects such as Array, Date etc.
+  "immed"         : false,    // true: Require immediate invocations to be wrapped in parens e.g. `(function () { } ());`
+  "latedef"       : false,    // true: Require variables/functions to be defined before being used
+  "newcap"        : false,    // true: Require capitalization of all constructor functions e.g. `new F()`
+  "noarg"         : true,     // true: Prohibit use of `arguments.caller` and `arguments.callee`
+  "noempty"       : false,     // true: Prohibit use of empty blocks
+  "nonbsp"        : true,     // true: Prohibit "non-breaking whitespace" characters.
+  "nonew"         : false,    // true: Prohibit use of constructors for side-effects (without assignment)
+  "plusplus"      : false,    // true: Prohibit use of `++` and `--`
+  "quotmark"      : false,    // Quotation mark consistency:
+  //   false    : do nothing (default)
+  //   true     : ensure whatever is used is consistent
+  //   "single" : require single quotes
+  //   "double" : require double quotes
+  "undef"         : true,     // true: Require all non-global variables to be declared (prevents global leaks)
+  "unused"        : true,     // Unused variables:
+  //   true     : all variables, last function parameter
+  //   "vars"   : all variables only
+  //   "strict" : all variables, all function parameters
+  "strict"        : false,     // true: Requires all functions run in ES5 Strict Mode
+  "maxparams"     : false,    // {int} Max number of formal params allowed per function
+  "maxdepth"      : false,    // {int} Max depth of nested blocks (within functions)
+  "maxstatements" : false,    // {int} Max number statements per function
+  "maxcomplexity" : false,    // {int} Max cyclomatic complexity per function
+  "maxlen"        : false,    // {int} Max number of characters per line
+  "varstmt"       : false,    // true: Disallow any var statements. Only `let` and `const` are allowed.
+
+  // Relaxing
+  "asi"           : false,     // true: Tolerate Automatic Semicolon Insertion (no semicolons)
+  "boss"          : false,     // true: Tolerate assignments where comparisons would be expected
+  "debug"         : false,     // true: Allow debugger statements e.g. browser breakpoints.
+  "eqnull"        : false,     // true: Tolerate use of `== null`
+  "esversion"     : 5,         // {int} Specify the ECMAScript version to which the code must adhere.
+  "moz"           : false,     // true: Allow Mozilla specific syntax (extends and overrides esnext features)
+  // (ex: `for each`, multiple try/catch, function expression…)
+  "evil"          : false,     // true: Tolerate use of `eval` and `new Function()`
+  "expr"          : false,     // true: Tolerate `ExpressionStatement` as Programs
+  "funcscope"     : false,     // true: Tolerate defining variables inside control statements
+  "globalstrict"  : false,     // true: Allow global "use strict" (also enables 'strict')
+  "iterator"      : false,     // true: Tolerate using the `__iterator__` property
+  "lastsemic"     : false,     // true: Tolerate omitting a semicolon for the last statement of a 1-line block
+  "laxbreak"      : false,     // true: Tolerate possibly unsafe line breakings
+  "laxcomma"      : false,     // true: Tolerate comma-first style coding
+  "loopfunc"      : false,     // true: Tolerate functions being defined in loops
+  "multistr"      : false,     // true: Tolerate multi-line strings
+  "noyield"       : false,     // true: Tolerate generator functions with no yield statement in them.
+  "notypeof"      : false,     // true: Tolerate invalid typeof operator values
+  "proto"         : false,     // true: Tolerate using the `__proto__` property
+  "scripturl"     : false,     // true: Tolerate script-targeted URLs
+  "shadow"        : false,     // true: Allows re-define variables later in code e.g. `var x=1; x=2;`
+  "sub"           : false,     // true: Tolerate using `[]` notation when it can still be expressed in dot notation
+  "supernew"      : false,     // true: Tolerate `new function () { ... };` and `new Object;`
+  "validthis"     : false,     // true: Tolerate using this in a non-constructor function
+
+  // Environments
+  "browser"       : true,     // Web Browser (window, document, etc)
+  "browserify"    : false,    // Browserify (node.js code in the browser)
+  "couch"         : false,    // CouchDB
+  "devel"         : true,     // Development/debugging (alert, confirm, etc)
+  "dojo"          : false,    // Dojo Toolkit
+  "jasmine"       : false,    // Jasmine
+  "jquery"        : false,    // jQuery
+  "mocha"         : true,     // Mocha
+  "mootools"      : false,    // MooTools
+  "node"          : true,     // Node.js
+  "nonstandard"   : false,    // Widely adopted globals (escape, unescape, etc)
+  "phantom"       : false,    // PhantomJS
+  "prototypejs"   : false,    // Prototype and Scriptaculous
+  "qunit"         : false,    // QUnit
+  "rhino"         : false,    // Rhino
+  "shelljs"       : false,    // ShellJS
+  "typed"         : false,    // Globals for typed array constructions
+  "worker"        : false,    // Web Workers
+  "wsh"           : false,    // Windows Scripting Host
+  "yui"           : false,    // Yahoo User Interface
+
+  // Custom Globals
+  "globals"       : {}        // additional predefined global variables
+}
\ No newline at end of file
diff --git a/README.md b/README.md
index 2020aaf..c4f668f 100644
--- a/README.md
+++ b/README.md
@@ -75,6 +75,37 @@ returned `Hashes` object, a `hash` which is the hash of hashes, and `files`,
 which is a key/value pairing of filename to hash.  Each file might be another
 object, which indicates there was a directory tree encountered.
 
+### Skipping Files/Directories Usage
+
+There is an additional parameter to the method, an `ignoreCallback` function that can be provided to allow the algorithm to skip over certain files or directories.
+This callback has the signature: `function(path, filename)`.  An example is as follows:
+
+    var dirsum = require('../lib/dirsum');
+
+    dirsum.digest('/your/tree', 'sha1', function(err, hashes) {
+      if (err) throw err;
+      console.log(JSON.stringify(hashes, null, 2));
+    }, function(path, filename) {
+      // ignore any files starting with '.'
+      if (filename.indexOf('.') === 0) {
+        return true;
+      }
+      return false;
+    });
+
+### NOTES
+
+If the `method` parameter (i.e. the second parameter) is not passed as a string, the `callback` and `ignoreCallback` are effectively shifted left respectively.
+In other words the signature for the `digest` method looks either like this:
+
+    dirsum.digest(path : string, method : string, callback: function(err, hashes), ignoreCallback : function(path, filename));
+
+OR
+
+    dirsum.digest(path : string, callback : function(err, hashes), ignoreCallback : function(path, filename));
+
+Finally, the file read implementation uses streams so that large files are NOT read-entirely into memory.
+
 ## Installation
 
     npm install dirsum
diff --git a/lib/dirsum.js b/lib/dirsum.js
index 33e98dd..7b2c2a6 100644
--- a/lib/dirsum.js
+++ b/lib/dirsum.js
@@ -24,7 +24,61 @@ function _summarize(method, hashes) {
   return obj;
 }
 
-function digest(root, method, callback) {
+function doDigesting(dirName, method, callback, ignoreCallback) {
+  var hashes = {};
+  fs.readdir(dirName, function(err, files) {
+    if (err) return callback(err);
+
+    if (files.length === 0) {
+      return callback(undefined, { hash: '', files: {} });
+    }
+
+    var processed = 0;
+    var total = files.length;
+    function bookkeeping() {
+      if (++processed >= total) {
+        callback(undefined, _summarize(method, hashes));
+      }
+    }
+    files.forEach(function(f) {
+      var path = dirName + '/' + f;
+      if (!ignoreCallback || !ignoreCallback(path, f)) {
+        fs.stat(path, function(err, stats) {
+          if (err) return callback(err);
+
+          if (stats.isDirectory()) {
+            return doDigesting(path, method, function(err, hash) {
+              if (err) return callback(err);
+
+              hashes[f] = hash;
+              bookkeeping();
+            }, ignoreCallback, hashes);
+          } else if (stats.isFile()) {
+            var hash = crypto.createHash(method);
+            var stream = fs.createReadStream(path, { encoding: 'utf8' });
+            stream.on('data', function(data) {
+              hash.update(data);
+            });
+            stream.on('end', function() {
+              hashes[f] = hash.digest('hex');
+              bookkeeping();
+            });
+            stream.on('error', function(err) {
+              callback(err);
+            });
+          } else {
+            console.error('Skipping hash of %s', f);
+            bookkeeping();
+          }
+        });
+      } else {
+        bookkeeping();
+      }
+    });
+  });
+}
+
+function digest(root, method, callback, ignoreCallback) {
   if (!root || typeof(root) !== 'string') {
     throw new TypeError('root is required (string)');
   }
@@ -32,6 +86,7 @@ function digest(root, method, callback) {
     if (typeof(method) === 'string') {
       // NO-OP
     } else if (typeof(method) === 'function') {
+      ignoreCallback = callback;
       callback = method;
       method = 'md5';
     } else {
@@ -44,51 +99,13 @@ function digest(root, method, callback) {
     throw new TypeError('callback is required (function)');
   }
 
-  var hashes = {};
-
-  fs.readdir(root, function(err, files) {
-    if (err) return callback(err);
-
-    if (files.length === 0) {
-      return callback(undefined, {hash: '', files: {}});
-    }
-
-    var hashed = 0;
-    files.forEach(function(f) {
-      var path = root + '/' + f;
-      fs.stat(path, function(err, stats) {
-        if (err) return callback(err);
-
-        if (stats.isDirectory()) {
-          return digest(path, method, function(err, hash) {
-            if (err) return hash;
-
-            hashes[f] = hash;
-            if (++hashed >= files.length) {
-              return callback(undefined, _summarize(method, hashes));
-            }
-          });
-        } else if (stats.isFile()) {
-          fs.readFile(path, 'utf8', function(err, data) {
-            if (err) return callback(err);
-
-            var hash = crypto.createHash(method);
-            hash.update(data);
-            hashes[f] = hash.digest('hex');
+  if (ignoreCallback && typeof(ignoreCallback) !== 'function') {
+    throw new TypeError('ignoreCallback is required to be a function');
+  }
 
-            if (++hashed >= files.length) {
-              return callback(undefined, _summarize(method, hashes));
-            }
-          });
-        } else {
-          console.error('Skipping hash of %s', f);
-          if (++hashed > files.length) {
-            return callback(undefined, _summarize(method, hashes));
-          }
-        }
-      });
-    });
-  });
+  doDigesting(root, method, function(err, hashes) {
+    callback(err, hashes);
+  }, ignoreCallback);
 }
 
 module.exports = {
diff --git a/package.json b/package.json
index 37d9b06..dbce9b5 100644
--- a/package.json
+++ b/package.json
@@ -1,7 +1,7 @@
 {
   "name": "dirsum",
   "description": "A small library that computes checksums of directory trees",
-  "version": "0.1.1",
+  "version": "0.1.2",
   "repository": {
     "type": "git",
     "url": "git://github.com/mcavage/node-dirsum.git"
diff --git a/tst/dirsum.test.js b/tst/dirsum.test.js
index 341948a..4716b4a 100644
--- a/tst/dirsum.test.js
+++ b/tst/dirsum.test.js
@@ -9,3 +9,13 @@ dirsum.digest(process.cwd() + '/tst/openldap', function(err, hashes) {
   assert.ok(hashes);
   console.log(JSON.stringify(hashes, null, 2));
 });
+
+dirsum.digest(process.cwd() + '/tst', function(err, hashes) {
+  assert.ok(!err);
+  assert.ok(hashes);
+  assert.ok(hashes.files);
+  assert.equal(hashes.files['dirsum.test.js'], undefined);
+  console.log(JSON.stringify(hashes, null, 2));
+}, function(path, filename) {
+  return filename === 'dirsum.test.js';
+});