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1. Install Self Hosted Plugins directly from the repository like you would any other plugin

Important Plugins stored in your repository will be altered to allow the update process to function:

1. A directory called __plugin-updates is added, containing only the file plugin-update-checker.class.php
2. Some code is inserted at the end of your main plugin file to instantiate the above class
3. All instances of the file .DS_STORE are removed (what can I say, I develop on a Mac and that file just bugs me)