Index: lang/english.txt
===================================================================
--- lang/english.txt	(revision 7149)
+++ lang/english.txt	(working copy)
@@ -1099,6 +1099,7 @@
 STR_CONFIG_PATCHES_SMOOTH_ECONOMY                               :{LTBLUE}Enable smooth economy (more, smaller changes)
 STR_CONFIG_PATCHES_ALLOW_SHARES                                 :{LTBLUE}Allow buying shares from other companies
 STR_CONFIG_PATCHES_DRAG_SIGNALS_DENSITY                         :{LTBLUE}When dragging, place signals every: {ORANGE}{STRING1} tile(s)
+STR_CONFIG_PATCHES_IMPROVED_SIGNALS_DENSITY                     :{LTBLUE}Use improved signal density: {ORANGE}{STRING1}
 STR_CONFIG_PATCHES_TOOLBAR_POS                                  :{LTBLUE}Position of main toolbar: {ORANGE}{STRING1}
 STR_CONFIG_PATCHES_TOOLBAR_POS_LEFT                             :Left
 STR_CONFIG_PATCHES_TOOLBAR_POS_CENTER                           :Centre
Index: rail.c
===================================================================
--- rail.c	(revision 7149)
+++ rail.c	(working copy)
@@ -63,6 +63,16 @@
 	TRACK_BIT_HORZ  /* TRACK_RIGHT */
 };
 
+/* Maps a track to another track running along the same axis. */
+const Track _same_axis_track[] = {
+	TRACK_X,     /* TRACK_X     */
+	TRACK_Y,     /* TRACK_Y     */
+	TRACK_LOWER, /* TRACK_UPPER */
+	TRACK_UPPER, /* TRACK_LOWER */
+	TRACK_RIGHT, /* TRACK_LEFT  */
+	TRACK_LEFT   /* TRACK_RIGHT */
+};
+
 /* Maps a trackdir to the (4-way) direction the tile is exited when following
  * that trackdir */
 const DiagDirection _trackdir_to_exitdir[] = {
Index: rail.h
===================================================================
--- rail.h	(revision 7149)
+++ rail.h	(working copy)
@@ -320,6 +320,15 @@
 }
 
 /**
+ * Maps a track to another track running along the same axis.
+ */
+static inline Track SameAxisTrack(Track track)
+{
+	extern const Track _same_axis_track[TRACK_END];
+	return _same_axis_track[track];
+}
+
+/**
  * Maps a trackdir to the (4-way) direction the tile is exited when following
  * that trackdir.
  */
Index: rail_cmd.c
===================================================================
--- rail_cmd.c	(revision 7149)
+++ rail_cmd.c	(working copy)
@@ -744,7 +744,7 @@
 static int32 CmdSignalTrackHelper(TileIndex tile, uint32 flags, uint32 p1, uint32 p2)
 {
 	int32 ret, total_cost, signal_ctr;
-	byte signals;
+	byte signals, alt_signals;
 	bool error = true;
 	TileIndex end_tile;
 
@@ -756,7 +756,7 @@
 
 	if (p1 >= MapSize()) return CMD_ERROR;
 	end_tile = p1;
-	if (signal_density == 0 || signal_density > 20) return CMD_ERROR;
+	if ((signal_density == 0) || (signal_density > 20)) return CMD_ERROR;
 
 	if (!IsTileType(tile, MP_RAILWAY)) return CMD_ERROR;
 
@@ -764,7 +764,10 @@
 
 	/* for vertical/horizontal tracks, double the given signals density
 	 * since the original amount will be too dense (shorter tracks) */
-	if (!IsDiagonalTrack(track)) signal_density *= 2;
+	if (!IsDiagonalTrack(track)) {
+		signal_density *= 2;
+		if (_patches.improved_signals_density) signal_density -= 1;
+	}
 
 	if (CmdFailed(ValidateAutoDrag(&trackdir, tile, end_tile))) return CMD_ERROR;
 
@@ -773,12 +776,17 @@
 	// copy the signal-style of the first rail-piece if existing
 	if (HasSignals(tile)) {
 		signals = _m[tile].m3 & SignalOnTrack(track);
-		if (signals == 0) signals = SignalOnTrack(track); /* Can this actually occur? */
+		alt_signals = _m[tile].m3 & SignalOnTrack(SameAxisTrack(track)); /* HACK: MY: do we need to convert m3 as well? */
+		if (signals == 0) {
+			signals = SignalOnTrack(track); /* Can this actually occur? */
+			alt_signals = SignalOnTrack(SameAxisTrack(track));
+		}
 
 		// copy signal/semaphores style (independent of CTRL)
 		semaphores = (GetSignalVariant(tile) == SIG_ELECTRIC ? 0 : 8);
 	} else { // no signals exist, drag a two-way signal stretch
 		signals = SignalOnTrack(track);
+		alt_signals = SignalOnTrack(SameAxisTrack(track));
 	}
 
 	/* signal_ctr         - amount of tiles already processed
@@ -793,7 +801,11 @@
 	for (;;) {
 		// only build/remove signals with the specified density
 		if (signal_ctr % signal_density == 0) {
-			ret = DoCommand(tile, TrackdirToTrack(trackdir) | semaphores, signals, flags, (mode == 1) ? CMD_REMOVE_SIGNALS : CMD_BUILD_SIGNALS);
+			if ((signal_ctr % 2) == 0) {
+				ret = DoCommand(tile, TrackdirToTrack(trackdir) | semaphores, signals, flags, (mode == 1) ? CMD_REMOVE_SIGNALS : CMD_BUILD_SIGNALS);
+			} else {
+				ret = DoCommand(tile, TrackdirToTrack(trackdir) | semaphores, alt_signals, flags, (mode == 1) ? CMD_REMOVE_SIGNALS : CMD_BUILD_SIGNALS);
+			}
 
 			/* Be user-friendly and try placing signals as much as possible */
 			if (!CmdFailed(ret)) {
Index: settings.c
===================================================================
--- settings.c	(revision 7149)
+++ settings.c	(working copy)
@@ -1275,6 +1275,7 @@
 	SDT_BOOL(Patches, signal_side,                   N, 0,  true,        STR_CONFIG_PATCHES_SIGNALSIDE,          RedrawScreen),
 	SDT_BOOL(Patches, always_small_airport,          0, 0, false,        STR_CONFIG_PATCHES_SMALL_AIRPORTS,      NULL),
 	 SDT_VAR(Patches, drag_signals_density,SLE_UINT8,S, 0,  4, 1, 20, 0, STR_CONFIG_PATCHES_DRAG_SIGNALS_DENSITY,NULL),
+	SDT_BOOL(Patches, improved_signals_density,      S, 0, false,        STR_CONFIG_PATCHES_IMPROVED_SIGNALS_DENSITY,NULL),
 
 	/***************************************************************************/
 	/* Vehicle section of the GUI-configure patches window */
Index: settings_gui.c
===================================================================
--- settings_gui.c	(revision 7149)
+++ settings_gui.c	(working copy)
@@ -581,6 +581,7 @@
 	"signal_side",
 	"always_small_airport",
 	"drag_signals_density",
+	"improved_signals_density",
 	"oil_refinery_limit",
 };
 
Index: variables.h
===================================================================
--- variables.h	(revision 7149)
+++ variables.h	(working copy)
@@ -181,6 +181,7 @@
 	uint8 map_y;
 
 	byte drag_signals_density;          // many signals density
+	bool improved_signals_density;      // improve the signal density on non-diagonal tracks.
 	bool ainew_active;                  // Is the new AI active?
 	bool ai_in_multiplayer;             // Do we allow AIs in multiplayer