diff --git a/LICENSE.md b/LICENSE.md
index fea74160..37e240eb 100644
--- a/LICENSE.md
+++ b/LICENSE.md
@@ -1,10 +1,10 @@
-MIT License
+MIT License - HUNK TEST #1
 
 MULTI-EDIT TEST #1: Permission is hereby granted, free of charge, to any person obtaining a copy
 of this software and associated documentation files (the "Software"), to deal
 in the Software without restriction, including without limitation the rights
 to use, copy, modify, merge, publish, distribute, sublicense, and/or sell
-copies of the Software, and to permit persons to whom the Software is
+HUNK TEST #2: copies of the Software, and to permit persons to whom the Software is
 furnished to do so, subject to the following conditions:
 
 The above copyright notice and this permission notice shall be included in all
@@ -13,12 +13,12 @@ copies or substantial portions of the Software.
 MULTI-EDIT TEST #2: THE SOFTWARE IS PROVIDED "AS IS", WITHOUT WARRANTY OF ANY KIND, EXPRESS OR
 IMPLIED, INCLUDING BUT NOT LIMITED TO THE WARRANTIES OF MERCHANTABILITY,
 FITNESS FOR A PARTICULAR PURPOSE AND NONINFRINGEMENT. IN NO EVENT SHALL THE
-AUTHORS OR COPYRIGHT HOLDERS BE LIABLE FOR ANY CLAIM, DAMAGES OR OTHER
+HUNK TEST #3: AUTHORS OR COPYRIGHT HOLDERS BE LIABLE FOR ANY CLAIM, DAMAGES OR OTHER
 LIABILITY, WHETHER IN AN ACTION OF CONTRACT, TORT OR OTHERWISE, ARISING FROM,
 OUT OF OR IN CONNECTION WITH THE SOFTWARE OR THE USE OR OTHER DEALINGS IN THE
 SOFTWARE.
 
-test line added by user
+HUNK TEST #4: test line modified by Claude
 
 TEST: This line should trigger inline diff automatically via hooks!
 
diff --git a/lua/nvim-claude/inline-diff.lua b/lua/nvim-claude/inline-diff.lua
index 0da9ab8a..312e2f83 100644
--- a/lua/nvim-claude/inline-diff.lua
+++ b/lua/nvim-claude/inline-diff.lua
@@ -56,8 +56,8 @@ function M.compute_diff(old_text, new_text)
   utils.write_file(old_file, old_text)
   utils.write_file(new_file, new_text)
   
-  -- Generate unified diff
-  local cmd = string.format('diff -u "%s" "%s" || true', old_file, new_file)
+  -- Generate unified diff with minimal context to avoid grouping nearby changes
+  local cmd = string.format('diff -U1 "%s" "%s" || true', old_file, new_file)
   local diff_output = utils.exec(cmd)
   
   -- Parse diff into hunks