Index: src/java/com/thoughtworks/qdox/model/JavaClass.java
===================================================================
--- src/java/com/thoughtworks/qdox/model/JavaClass.java	(revision 515)
+++ src/java/com/thoughtworks/qdox/model/JavaClass.java	(working copy)
@@ -424,13 +424,20 @@
 
     public JavaClass getNestedClassByName(String name) {
         JavaClass[] classes = getNestedClasses();
-
+        
+        int separatorIndex = name.indexOf('.');
+        String directInnerClassName = (separatorIndex > 0 ? name.substring(0, separatorIndex) : name); 
         for (int i = 0; i < classes.length; i++) {
-            if (classes[i].getName().equals(name)) {
-                return classes[i];
+        	JavaClass jClass = classes[i];
+            if (jClass.getName().equals(directInnerClassName)) {
+            	if(separatorIndex > 0) {
+                    return jClass.getNestedClassByName(name.substring(separatorIndex+1));
+            	}
+            	else {
+                    return jClass;
+            	}
             }
         }
-
         return null;
     }
 
Index: src/java/com/thoughtworks/qdox/model/Type.java
===================================================================
--- src/java/com/thoughtworks/qdox/model/Type.java	(revision 515)
+++ src/java/com/thoughtworks/qdox/model/Type.java	(working copy)
@@ -135,15 +135,19 @@
     }
 
     public JavaClass getJavaClass() {
+    	JavaClass result = null;
+    	
         JavaClassParent javaClassParent = getJavaClassParent();
-        if (javaClassParent == null) {
-            return null;
+        if (javaClassParent != null) {
+        	result = javaClassParent.getNestedClassByName(getValue());
+	        if(result == null) {
+	            ClassLibrary classLibrary = javaClassParent.getClassLibrary();
+	            if (classLibrary != null) {
+	            	result = classLibrary.getClassByName(getValue());
+	            }
+	        }
         }
-        ClassLibrary classLibrary = javaClassParent.getClassLibrary();
-        if (classLibrary == null) {
-            return null;
-        }
-        return classLibrary.getClassByName(getValue());
+        return result;
     }
 
     /**
Index: src/test/com/thoughtworks/qdox/ClassResolutionTest.java
===================================================================
--- src/test/com/thoughtworks/qdox/ClassResolutionTest.java	(revision 515)
+++ src/test/com/thoughtworks/qdox/ClassResolutionTest.java	(working copy)
@@ -77,4 +77,20 @@
 
         builder.addSource(new StringReader(source));
     }
+    
+    //from QDOX-86
+    public void testInnerClassInMethod() throws Exception {
+    	JavaDocBuilder builder = new JavaDocBuilder();
+    	String source = "package some.pack;\n" +
+    	"class Test {\n" +
+    	"void some(Inner.Inner2 a) {}\n" +
+    	"static interface Inner {\n" +
+    	"static interface Inner2 { }\n" +
+    	"}\n" +
+    	"}";
+    	builder.addSource(new StringReader(source));
+    	JavaMethod method = builder.getClassByName("some.pack.Test").getMethods()[0];
+    	JavaParameter parameter = method.getParameters()[0];
+    	assertEquals("some.pack.Test$Inner$Inner2", parameter.getType().getJavaClass().getFullyQualifiedName());
+    }
 }