diff --git a/rust-engine/src/api.rs b/rust-engine/src/api.rs
index c531f36..41c4063 100644
--- a/rust-engine/src/api.rs
+++ b/rust-engine/src/api.rs
@@ -1,9 +1,8 @@
-use crate::gemini_client;
 use crate::vector_db::QdrantClient;
 use crate::storage;
 use anyhow::Result;
 use bytes::Buf;
-use futures_util::{StreamExt, TryStreamExt};
+use futures_util::TryStreamExt;
 use serde::Deserialize;
 use sqlx::{MySqlPool, Row};
 use warp::{multipart::FormData, Filter, Rejection, Reply};
@@ -80,10 +79,7 @@ pub fn routes(pool: MySqlPool) -> impl Filter<Extract = impl Reply, Error = Reje
 }
 
 async fn handle_upload(mut form: FormData, pool: MySqlPool) -> Result<impl Reply, Rejection> {
-    // qdrant client
-    let qdrant_url = std::env::var("QDRANT_URL").unwrap_or_else(|_| "http://qdrant:6333".to_string());
-    let qdrant = QdrantClient::new(&qdrant_url);
-
+    let mut created_files = Vec::new();
     while let Some(field) = form.try_next().await.map_err(|_| warp::reject())? {
     let _name = field.name().to_string();
         let filename = field
@@ -116,7 +112,7 @@ async fn handle_upload(mut form: FormData, pool: MySqlPool) -> Result<impl Reply
 
         // Insert file record with pending_analysis = true, description = NULL
         let id = uuid::Uuid::new_v4().to_string();
-        sqlx::query("INSERT INTO files (id, filename, path, description, pending_analysis) VALUES (?, ?, ?, ?, ?)")
+        sqlx::query("INSERT INTO files (id, filename, path, description, pending_analysis, analysis_status) VALUES (?, ?, ?, ?, ?, 'Queued')")
             .bind(&id)
             .bind(&filename)
             .bind(path.to_str().unwrap())
@@ -128,10 +124,18 @@ async fn handle_upload(mut form: FormData, pool: MySqlPool) -> Result<impl Reply
                 tracing::error!("DB insert error: {}", e);
                 warp::reject()
             })?;
-        // Enqueue worker task to process file (to be implemented)
+        created_files.push(serde_json::json!({
+            "id": id,
+            "filename": filename,
+            "pending_analysis": true,
+            "analysis_status": "Queued"
+        }));
     }
 
-    Ok(warp::reply::json(&serde_json::json!({"success": true})))
+    Ok(warp::reply::json(&serde_json::json!({
+        "uploaded": created_files.len(),
+        "files": created_files
+    })))
 }
 
 async fn handle_import_demo(params: std::collections::HashMap<String, String>, pool: MySqlPool) -> Result<impl Reply, Rejection> {
@@ -209,7 +213,7 @@ async fn handle_delete(q: DeleteQuery, pool: MySqlPool) -> Result<impl Reply, Re
         let _ = storage::delete_file(std::path::Path::new(&path));
         // Remove from Qdrant
         let qdrant_url = std::env::var("QDRANT_URL").unwrap_or_else(|_| "http://qdrant:6333".to_string());
-        let qdrant = crate::vector_db::QdrantClient::new(&qdrant_url);
+        let qdrant = QdrantClient::new(&qdrant_url);
         let _ = qdrant.delete_point(&q.id).await;
         let _ = sqlx::query("DELETE FROM files WHERE id = ?").bind(&q.id).execute(&pool).await;
         return Ok(warp::reply::json(&serde_json::json!({"deleted": true})));
diff --git a/rust-engine/src/file_worker.rs b/rust-engine/src/file_worker.rs
index b70cb59..0c2e4b7 100644
--- a/rust-engine/src/file_worker.rs
+++ b/rust-engine/src/file_worker.rs
@@ -1,4 +1,5 @@
-use crate::gemini_client::{generate_text, demo_text_embedding, DEMO_EMBED_DIM};
+use crate::gemini_client::{demo_text_embedding, generate_text_with_model, DEMO_EMBED_DIM};
+use crate::vector;
 use crate::vector_db::QdrantClient;
 use sqlx::MySqlPool;
 use anyhow::Result;
@@ -27,6 +28,9 @@ impl FileWorker {
                     info!("Processing file {}", fid);
                     if let Err(e) = self.process_file(&fid).await {
                         error!("Error processing file {}: {}", fid, e);
+                        if let Err(mark_err) = self.mark_failed(&fid, &format!("{}", e)).await {
+                            error!("Failed to mark file {} as failed: {}", fid, mark_err);
+                        }
                     }
                 }
                 Ok(None) => {
@@ -66,12 +70,18 @@ impl FileWorker {
             .bind(file_id)
             .fetch_one(&self.pool)
             .await?;
-        let filename: String = row.get("filename");
-        let path: String = row.get("path");
+    let filename: String = row.get("filename");
+    let _path: String = row.get("path");
 
         // Stage 1: Gemini 2.5 Flash for description
-        std::env::set_var("GEMINI_MODEL", "gemini-1.5-flash");
-        let desc = generate_text(&format!("Describe the file '{filename}' and extract all key components, keywords, and details for later vectorization. Be comprehensive and factual.")).await.unwrap_or_else(|e| format!("[desc error: {}]", e));
+        let desc = generate_text_with_model(
+            "gemini-2.5-flash",
+            &format!(
+                "Describe the file '{filename}' and extract all key components, keywords, and details for later vectorization. Be comprehensive and factual."
+            ),
+        )
+        .await
+        .unwrap_or_else(|e| format!("[desc error: {}]", e));
         sqlx::query("UPDATE files SET description = ?, analysis_status = 'InProgress' WHERE id = ?")
             .bind(&desc)
             .bind(file_id)
@@ -79,12 +89,26 @@ impl FileWorker {
             .await?;
 
         // Stage 2: Gemini 2.5 Pro for deep vector graph data
-        std::env::set_var("GEMINI_MODEL", "gemini-1.5-pro");
-        let vector_graph = generate_text(&format!("Given the file '{filename}' and its description: {desc}\nGenerate a set of vector graph data (keywords, use cases, relationships) that can be used for broad and precise search. Only include what is directly supported by the file.")).await.unwrap_or_else(|e| format!("[vector error: {}]", e));
+        let vector_graph = generate_text_with_model(
+            "gemini-2.5-pro",
+            &format!(
+                "Given the file '{filename}' and its description: {desc}\nGenerate a set of vector graph data (keywords, use cases, relationships) that can be used for broad and precise search. Only include what is directly supported by the file."
+            ),
+        )
+        .await
+        .unwrap_or_else(|e| format!("[vector error: {}]", e));
 
         // Stage 3: Embed and upsert to Qdrant
         let emb = demo_text_embedding(&vector_graph).await?;
-        self.qdrant.upsert_point(file_id, emb).await?;
+        match self.qdrant.upsert_point(file_id, emb.clone()).await {
+            Ok(_) => {
+                let _ = vector::store_embedding(file_id, emb.clone());
+            }
+            Err(err) => {
+                error!("Qdrant upsert failed for {}: {}", file_id, err);
+                let _ = vector::store_embedding(file_id, emb);
+            }
+        }
 
         // Mark file as ready
         sqlx::query("UPDATE files SET pending_analysis = FALSE, analysis_status = 'Completed' WHERE id = ?")
@@ -93,4 +117,17 @@ impl FileWorker {
             .await?;
         Ok(())
     }
+
+    async fn mark_failed(&self, file_id: &str, reason: &str) -> Result<()> {
+        sqlx::query("UPDATE files SET analysis_status = 'Failed', pending_analysis = TRUE WHERE id = ?")
+            .bind(file_id)
+            .execute(&self.pool)
+            .await?;
+        sqlx::query("UPDATE files SET description = COALESCE(description, ?) WHERE id = ?")
+            .bind(format!("[analysis failed: {}]", reason))
+            .bind(file_id)
+            .execute(&self.pool)
+            .await?;
+        Ok(())
+    }
 }
diff --git a/rust-engine/src/gemini_client.rs b/rust-engine/src/gemini_client.rs
index 8639ed2..5741166 100644
--- a/rust-engine/src/gemini_client.rs
+++ b/rust-engine/src/gemini_client.rs
@@ -1,30 +1,11 @@
 use anyhow::Result;
-use serde::{Deserialize, Serialize};
-use serde_json::json;
 use reqwest::Client;
+use serde::Deserialize;
+use serde_json::json;
 
-// NOTE: This is a small stub to represent where you'd call the Gemini API.
-// Replace with real API call and proper auth handling for production.
-
-#[derive(Debug, Deserialize)]
-pub struct GeminiTokenResponse {
-    pub token: String,
-}
-
-pub async fn generate_token_for_file(_path: &str) -> Result<String> {
-    Ok("gemini-token-placeholder".to_string())
-}
-
-/// Demo embedding generator - deterministic pseudo-embedding from filename/path
-pub fn demo_embedding_from_path(path: &str) -> Vec<f32> {
-    // Very simple: hash bytes into a small vector
-    let mut v = vec![0f32; 64];
-    for (i, b) in path.as_bytes().iter().enumerate() {
-        let idx = i % v.len();
-        v[idx] += (*b as f32) / 255.0;
-    }
-    v
-}
+// NOTE: This file provides lightweight helpers around the Gemini API. For the
+// hackathon demo we fall back to deterministic strings when the API key is not
+// configured so the flows still work end-to-end.
 
 pub const DEMO_EMBED_DIM: usize = 64;
 
@@ -38,16 +19,27 @@ pub async fn demo_text_embedding(text: &str) -> Result<Vec<f32>> {
     Ok(v)
 }
 
-/// Generate text with Gemini (Generative Language API). Falls back to a demo string if GEMINI_API_KEY is not set.
+/// Generate text using the default model (GEMINI_MODEL or gemini-2.5-pro).
+#[allow(dead_code)]
 pub async fn generate_text(prompt: &str) -> Result<String> {
+    let model = std::env::var("GEMINI_MODEL").unwrap_or_else(|_| "gemini-2.5-pro".to_string());
+    generate_text_with_model(&model, prompt).await
+}
+
+/// Generate text with an explicit Gemini model. Falls back to a deterministic
+/// response when the API key is not set so the demo still runs.
+pub async fn generate_text_with_model(model: &str, prompt: &str) -> Result<String> {
     let api_key = match std::env::var("GEMINI_API_KEY") {
         Ok(k) if !k.is_empty() => k,
         _ => {
-            return Ok(format!("[demo] Gemini not configured. Prompt preview: {}", truncate(prompt, 240)));
+            return Ok(format!(
+                "[demo] Gemini ({}) not configured. Prompt preview: {}",
+                model,
+                truncate(prompt, 240)
+            ));
         }
     };
 
-    let model = std::env::var("GEMINI_MODEL").unwrap_or_else(|_| "gemini-1.5-pro".to_string());
     let url = format!(
         "https://generativelanguage.googleapis.com/v1beta/models/{}:generateContent?key={}",
         model, api_key
@@ -62,7 +54,12 @@ pub async fn generate_text(prompt: &str) -> Result<String> {
     let status = resp.status();
     let txt = resp.text().await?;
     if !status.is_success() {
-        return Ok(format!("[demo] Gemini error {}: {}", status, truncate(&txt, 240)));
+        return Ok(format!(
+            "[demo] Gemini ({}) error {}: {}",
+            model,
+            status,
+            truncate(&txt, 240)
+        ));
     }
 
     #[derive(Deserialize)]
@@ -84,5 +81,9 @@ pub async fn generate_text(prompt: &str) -> Result<String> {
 }
 
 fn truncate(s: &str, max: usize) -> String {
-    if s.len() <= max { s.to_string() } else { format!("{}…", &s[..max]) }
+    if s.len() <= max {
+        s.to_string()
+    } else {
+        format!("{}…", &s[..max])
+    }
 }
diff --git a/rust-engine/src/models.rs b/rust-engine/src/models.rs
index 8392e8b..59f0e12 100644
--- a/rust-engine/src/models.rs
+++ b/rust-engine/src/models.rs
@@ -14,6 +14,7 @@ pub struct FileRecord {
 }
 
 impl FileRecord {
+    #[allow(dead_code)]
     pub fn new(filename: impl Into<String>, path: impl Into<String>, description: Option<String>) -> Self {
         Self {
             id: Uuid::new_v4().to_string(),
diff --git a/rust-engine/src/worker.rs b/rust-engine/src/worker.rs
index a82a198..e3e96bb 100644
--- a/rust-engine/src/worker.rs
+++ b/rust-engine/src/worker.rs
@@ -1,5 +1,6 @@
-use crate::gemini_client::{demo_text_embedding, DEMO_EMBED_DIM, generate_text};
+use crate::gemini_client::{demo_text_embedding, generate_text_with_model, DEMO_EMBED_DIM};
 use crate::models::{QueryRecord, QueryStatus};
+use crate::vector;
 use crate::vector_db::QdrantClient;
 use anyhow::Result;
 use sqlx::MySqlPool;
@@ -84,15 +85,34 @@ impl Worker {
 
         // Stage 2: embed query text
         let text = q.payload.get("q").and_then(|v| v.as_str()).unwrap_or("");
-    let emb = demo_text_embedding(text).await?;
-    let top_k = q.payload.get("top_k").and_then(|v| v.as_u64()).unwrap_or(5) as usize;
+        let emb = demo_text_embedding(text).await?;
+        let top_k = q.payload.get("top_k").and_then(|v| v.as_u64()).unwrap_or(5) as usize;
+        let top_k = top_k.max(1).min(20);
 
         // Check cancellation
         if self.is_cancelled(&q.id).await? { return Ok(()); }
 
         // Stage 3: search top-K in Qdrant
-    let hits = self.qdrant.search_top_k(emb, top_k).await.unwrap_or_default();
-    let top_ids: Vec<String> = hits.iter().map(|(id, _)| id.clone()).collect();
+        let hits = match self.qdrant.search_top_k(emb.clone(), top_k).await {
+            Ok(list) if !list.is_empty() => list,
+            Ok(_) => Vec::new(),
+            Err(err) => {
+                error!("Qdrant search failed for query {}: {}", q.id, err);
+                Vec::new()
+            }
+        };
+
+        let hits = if hits.is_empty() {
+            match vector::query_top_k(&emb, top_k) {
+                Ok(fallback_ids) if !fallback_ids.is_empty() => {
+                    info!("Using in-memory fallback for query {}", q.id);
+                    fallback_ids.into_iter().map(|id| (id, 0.0)).collect()
+                }
+                _ => Vec::new(),
+            }
+        } else {
+            hits
+        };
 
         // Check cancellation
         if self.is_cancelled(&q.id).await? { return Ok(()); }
@@ -117,11 +137,23 @@ impl Worker {
 
         // Stage 5: call Gemini to analyze relationships and propose follow-up details strictly from provided files
         let relationships_prompt = build_relationships_prompt(text, &files_json);
-        let relationships = generate_text(&relationships_prompt).await.unwrap_or_else(|e| format!("[demo] relationships error: {}", e));
+        let (relationships, final_answer) = if files_json.is_empty() {
+            (
+                "No analyzed files are ready yet. Try seeding demo data or wait for processing to finish.".to_string(),
+                "I could not find any relevant documents yet. Once files finish analysis I will be able to answer.".to_string(),
+            )
+        } else {
+            let relationships = generate_text_with_model("gemini-2.5-pro", &relationships_prompt)
+                .await
+                .unwrap_or_else(|e| format!("[demo] relationships error: {}", e));
 
-        // Stage 6: final answer synthesis with strict constraints (no speculation; say unknown when insufficient)
-        let final_prompt = build_final_answer_prompt(text, &files_json, &relationships);
-        let final_answer = generate_text(&final_prompt).await.unwrap_or_else(|e| format!("[demo] final answer error: {}", e));
+            // Stage 6: final answer synthesis with strict constraints (no speculation; say unknown when insufficient)
+            let final_prompt = build_final_answer_prompt(text, &files_json, &relationships);
+            let final_answer = generate_text_with_model("gemini-2.5-pro", &final_prompt)
+                .await
+                .unwrap_or_else(|e| format!("[demo] final answer error: {}", e));
+            (relationships, final_answer)
+        };
 
         // Stage 7: persist results
         let result = serde_json::json!({