diff --git a/lib/ace/mode/folding/html_test.js b/lib/ace/mode/folding/html_test.js
index 2698d936..3471ee57 100644
--- a/lib/ace/mode/folding/html_test.js
+++ b/lib/ace/mode/folding/html_test.js
@@ -153,6 +153,30 @@ module.exports = {
         
         assert.range(session.getFoldWidgetRange(0), 0, 5, 5, 0);
         assert.range(session.getFoldWidgetRange(5), 0, 5, 5, 0);
+    },
+    
+    "test: fold multiple nested optional elements": function() {
+        var session = new EditSession([
+            '<p>',
+            '<li>',
+            '<p>juhu',
+            '<p>',
+            'kinners',
+            '</li>'
+        ]);
+        
+        var mode = new HtmlMode();
+        session.setMode(mode);
+        session.setFoldStyle("markbeginend");
+        
+        assert.equal(session.getFoldWidget(0), "start");
+        assert.equal(session.getFoldWidget(1), "start");
+        assert.equal(session.getFoldWidget(2), "start");
+        assert.equal(session.getFoldWidget(3), "start");
+        assert.equal(session.getFoldWidget(4), "");
+        assert.equal(session.getFoldWidget(5), "end");
+        
+        assert.range(session.getFoldWidgetRange(1), 1, 4, 5, 0);
     }
 };
 
diff --git a/lib/ace/mode/folding/xml.js b/lib/ace/mode/folding/xml.js
index 3a353eba..27f57a8c 100644
--- a/lib/ace/mode/folding/xml.js
+++ b/lib/ace/mode/folding/xml.js
@@ -192,9 +192,6 @@ function is(token, type) {
             if (!tag || top.tagName == tag.tagName) {
                 return stack.pop();
             }
-            else if (this.optionalEndTags.hasOwnProperty(tag.tagName)) {
-                return;
-            }
             else if (this.optionalEndTags.hasOwnProperty(top.tagName)) {
                 stack.pop();
                 continue;