I have a svn working copy checked out. The root directory has a .svn subdirectory. However, the other subdirectories of the project don’t have a .svn hidden directory in them. They do contain versioned files. I thought every subdirectory has to include its .svn. What’s going on?
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You must be using subversion version 1.7.x which has this working copy enhancement (WC-NG). In this feature, only root working copy contains hidden directory to hold pristine copies (original versions). See here to understand rationale behind WC-NG feature.