diff --git a/Makefile b/Makefile
index b3d5fe5..42f2c84 100644
--- a/Makefile
+++ b/Makefile
@@ -4,6 +4,9 @@ build:
 	GOOS=linux GOARCH=amd64 go build -ldflags="-s -w" -gcflags "all=-trimpath=$(pwd)" -o build/wings_linux_amd64 -v wings.go
 	GOOS=linux GOARCH=arm64 go build -ldflags="-s -w" -gcflags "all=-trimpath=$(pwd)" -o build/wings_linux_arm64 -v wings.go
 
+race:
+	go build -ldflags="-X github.com/pterodactyl/wings/system.Version=$(GIT_HEAD)" -race
+
 debug:
 	go build -ldflags="-X github.com/pterodactyl/wings/system.Version=$(GIT_HEAD)"
 	sudo ./wings --debug --ignore-certificate-errors --config config.yml --pprof --pprof-block-rate 1
diff --git a/cmd/migrate_vhd.go b/cmd/migrate_vhd.go
index 2adba30..36e1eb4 100644
--- a/cmd/migrate_vhd.go
+++ b/cmd/migrate_vhd.go
@@ -14,6 +14,7 @@ import (
 	"github.com/pterodactyl/wings/loggers/cli"
 	"github.com/pterodactyl/wings/remote"
 	"github.com/pterodactyl/wings/server"
+	"github.com/pterodactyl/wings/server/filesystem"
 	"github.com/spf13/cobra"
 )
 
@@ -55,7 +56,7 @@ func (m *MigrateVHDCommand) Run(ctx context.Context) error {
 	for _, s := range m.manager.All() {
 		s.Log().Debug("starting migration of server contents to virtual disk...")
 
-		v := s.Filesystem().NewVHD()
+		v := vhd.New(s.DiskSpace(), filesystem.VirtualDiskPath(s.Id()), s.Filesystem().Path())
 		if err := v.Allocate(ctx); err != nil {
 			return errors.WithStackIf(err)
 		}
diff --git a/installer/installer.go b/installer/installer.go
index f414918..6a2cf65 100644
--- a/installer/installer.go
+++ b/installer/installer.go
@@ -38,7 +38,7 @@ func New(ctx context.Context, manager *server.Manager, details ServerDetails) (*
 
 	// Create a new server instance using the configuration we wrote to the disk
 	// so that everything gets instantiated correctly on the struct.
-	s, err := manager.InitServer(c)
+	s, err := manager.InitServer(ctx, c)
 	if err != nil {
 		return nil, errors.WrapIf(err, "installer: could not init server instance")
 	}
diff --git a/internal/vhd/vhd.go b/internal/vhd/vhd.go
index bd4f19c..05b887b 100644
--- a/internal/vhd/vhd.go
+++ b/internal/vhd/vhd.go
@@ -43,6 +43,7 @@ type CfgOption func(d *Disk) *Disk
 
 // Disk represents the underlying virtual disk for the instance.
 type Disk struct {
+	// The total size of the disk allowed in bytes.
 	size      int64
 	diskPath  string
 	mountAt   string
@@ -51,8 +52,8 @@ type Disk struct {
 }
 
 // New returns a new Disk instance. The "size" parameter should be provided in
-// megabytes of space allowed for the disk. An additional slice of option
-// callbacks can be provided to programatically swap out the underlying filesystem
+// bytes of space allowed for the disk. An additional slice of option callbacks
+// can be provided to programatically swap out the underlying filesystem
 // implementation or the underlying command exection engine.
 func New(size int64, diskPath string, mountAt string, opts ...func(*Disk)) *Disk {
 	if diskPath == "" || mountAt == "" {
@@ -181,7 +182,10 @@ func (d *Disk) Allocate(ctx context.Context) error {
 	} else if err != nil {
 		return errors.Wrap(err, "vhd: failed to check for existence of root disk")
 	}
-	cmd := d.commander(ctx, "fallocate", "-l", fmt.Sprintf("%dM", d.size), d.diskPath)
+	// We use 1024 as the multiplier for all of the disk space logic within the
+	// application. Passing "K" (/1024) is the same as "KiB" for fallocate, but
+	// is different than "KB" (/1000).
+	cmd := d.commander(ctx, "fallocate", "-l", fmt.Sprintf("%dK", d.size / 1024), d.diskPath)
 	if _, err := cmd.Output(); err != nil {
 		msg := "vhd: failed to execute fallocate command"
 		if v, ok := err.(*exec.ExitError); ok {
diff --git a/internal/vhd/vhd_test.go b/internal/vhd/vhd_test.go
index ab427ae..a92e79a 100644
--- a/internal/vhd/vhd_test.go
+++ b/internal/vhd/vhd_test.go
@@ -62,14 +62,14 @@ func newMockDisk(c CommanderProvider) *Disk {
 	if c != nil {
 		w = c
 	}
-	return New(100, "/foo", "/bar", WithFs(afero.NewMemMapFs()), WithCommander(w))
+	return New(100 * 1024 * 1024, "/foo", "/bar", WithFs(afero.NewMemMapFs()), WithCommander(w))
 }
 
 func Test_New(t *testing.T) {
 	t.Run("creates expected struct", func(t *testing.T) {
-		d := New(100, "/foo", "/bar")
+		d := New(100 * 1024 * 1024, "/foo", "/bar")
 		assert.NotNil(t, d)
-		assert.Equal(t, int64(100), d.size)
+		assert.Equal(t, int64(100 * 1024 * 1024), d.size)
 		assert.Equal(t, "/foo", d.diskPath)
 		assert.Equal(t, "/bar", d.mountAt)
 
@@ -360,7 +360,7 @@ func TestDisk_Allocate(t *testing.T) {
 				output: func() ([]byte, error) {
 					called = true
 					assert.Equal(t, "fallocate", name)
-					assert.Equal(t, []string{"-l", "100M", "/foo"}, args)
+					assert.Equal(t, []string{"-l", "102400K", "/foo"}, args)
 					return nil, nil
 				},
 			}
diff --git a/server/filesystem/filesystem.go b/server/filesystem/filesystem.go
index cb70b44..73f5cbe 100644
--- a/server/filesystem/filesystem.go
+++ b/server/filesystem/filesystem.go
@@ -2,6 +2,7 @@ package filesystem
 
 import (
 	"bufio"
+	"context"
 	"io"
 	"io/ioutil"
 	"os"
@@ -20,6 +21,7 @@ import (
 	ignore "github.com/sabhiram/go-gitignore"
 
 	"github.com/pterodactyl/wings/config"
+	"github.com/pterodactyl/wings/internal/vhd"
 	"github.com/pterodactyl/wings/system"
 )
 
@@ -30,6 +32,7 @@ type Filesystem struct {
 	diskUsed          int64
 	diskCheckInterval time.Duration
 	denylist          *ignore.GitIgnore
+	vhd               *vhd.Disk
 
 	// The maximum amount of disk space (in bytes) that this Filesystem instance can use.
 	diskLimit int64
@@ -41,8 +44,9 @@ type Filesystem struct {
 }
 
 // New creates a new Filesystem instance for a given server.
-func New(root string, size int64, denylist []string) *Filesystem {
-	return &Filesystem{
+func New(uuid string, size int64, denylist []string) *Filesystem {
+	root := filepath.Join(config.Get().System.Data, uuid)
+	fs := Filesystem{
 		root:              root,
 		diskLimit:         size,
 		diskCheckInterval: time.Duration(config.Get().System.DiskCheckInterval),
@@ -50,6 +54,16 @@ func New(root string, size int64, denylist []string) *Filesystem {
 		lookupInProgress:  system.NewAtomicBool(false),
 		denylist:          ignore.CompileIgnoreLines(denylist...),
 	}
+
+	if config.Get().System.UseVirtualDisks {
+		fs.vhd = vhd.New(size, VirtualDiskPath(uuid), fs.root)
+	}
+
+	return &fs
+}
+
+func VirtualDiskPath(uuid string) string {
+	return filepath.Join(config.Get().System.Data, ".vhd/", uuid+".img")
 }
 
 // Path returns the root path for the Filesystem instance.
@@ -57,6 +71,25 @@ func (fs *Filesystem) Path() string {
 	return fs.root
 }
 
+// IsVirtual returns true if the filesystem is currently using a virtual disk.
+func (fs *Filesystem) IsVirtual() bool {
+	return fs.vhd != nil
+}
+
+// MountDisk will attempt to mount the underlying virtual disk for the server.
+// If the disk is already mounted this is a no-op function. If the filesystem is
+// not configured for virtual disks this function will panic.
+func (fs *Filesystem) MountDisk(ctx context.Context) error {
+	if !fs.IsVirtual() {
+		panic(errors.New("filesystem: cannot call MountDisk on Filesystem instance without VHD present"))
+	}
+	err := fs.vhd.Mount(ctx)
+	if errors.Is(err, vhd.ErrFilesystemMounted) {
+		return nil
+	}
+	return errors.WrapIf(err, "filesystem: failed to mount VHD")
+}
+
 // File returns a reader for a file instance as well as the stat information.
 func (fs *Filesystem) File(p string) (*os.File, Stat, error) {
 	cleaned, err := fs.SafePath(p)
diff --git a/server/filesystem/vhd.go b/server/filesystem/vhd.go
deleted file mode 100644
index 3a34bb6..0000000
--- a/server/filesystem/vhd.go
+++ /dev/null
@@ -1,17 +0,0 @@
-package filesystem
-
-import (
-	"path/filepath"
-	"strings"
-
-	"github.com/pterodactyl/wings/config"
-	"github.com/pterodactyl/wings/internal/vhd"
-)
-
-func (fs *Filesystem) NewVHD() *vhd.Disk {
-	parts := strings.Split(fs.root, "/")
-	disk := filepath.Join(config.Get().System.Data, ".disks/", parts[len(parts)-1]+".img")
-
-	return vhd.New(250, disk, fs.root)
-	// return vhd.New(fs.diskLimit/1024/1024, disk, fs.root)
-}
diff --git a/server/manager.go b/server/manager.go
index 6733b35..51ab1d8 100644
--- a/server/manager.go
+++ b/server/manager.go
@@ -5,7 +5,6 @@ import (
 	"fmt"
 	"io"
 	"os"
-	"path/filepath"
 	"runtime"
 	"sync"
 	"time"
@@ -184,7 +183,7 @@ func (m *Manager) ReadStates() (map[string]string, error) {
 // InitServer initializes a server using a data byte array. This will be
 // marshaled into the given struct using a YAML marshaler. This will also
 // configure the given environment for a server.
-func (m *Manager) InitServer(data remote.ServerConfigurationResponse) (*Server, error) {
+func (m *Manager) InitServer(ctx context.Context, data remote.ServerConfigurationResponse) (*Server, error) {
 	s, err := New(m.client)
 	if err != nil {
 		return nil, err
@@ -196,7 +195,15 @@ func (m *Manager) InitServer(data remote.ServerConfigurationResponse) (*Server,
 		return nil, errors.WithStackIf(err)
 	}
 
-	s.fs = filesystem.New(filepath.Join(config.Get().System.Data, s.ID()), s.DiskSpace(), s.Config().Egg.FileDenylist)
+	s.fs = filesystem.New(s.Id(), s.DiskSpace(), s.Config().Egg.FileDenylist)
+	// If this is a virtuakl filesystem we need to go ahead and mount the disk
+	// so that everything is accessible.
+	if s.fs.IsVirtual() {
+		log.WithField("server", s.Id()).Info("mounting virtual disk for server")
+		if err := s.fs.MountDisk(ctx); err != nil {
+			return nil, err
+		}
+	}
 
 	// Right now we only support a Docker based environment, so I'm going to hard code
 	// this logic in. When we're ready to support other environment we'll need to make
@@ -258,7 +265,7 @@ func (m *Manager) init(ctx context.Context) error {
 				log.WithField("server", data.Uuid).WithField("error", err).Error("failed to parse server configuration from API response, skipping...")
 				return
 			}
-			s, err := m.InitServer(d)
+			s, err := m.InitServer(ctx, d)
 			if err != nil {
 				log.WithField("server", data.Uuid).WithField("error", err).Error("failed to load server, skipping...")
 				return