diff --git a/.github/workflows/continuous-integration.yml b/.github/workflows/continuous-integration.yml
index db473115af..b56bad9e5e 100644
--- a/.github/workflows/continuous-integration.yml
+++ b/.github/workflows/continuous-integration.yml
@@ -18,6 +18,7 @@ jobs:
         uses: actions/checkout@v3
         with:
           fetch-depth: 0
+          submodules: true
 
       - name: Setup Python environment
         uses: actions/setup-python@v4
diff --git a/.github/workflows/cross-platform-test.yml b/.github/workflows/cross-platform-test.yml
index 62b243d851..7e95c1578f 100644
--- a/.github/workflows/cross-platform-test.yml
+++ b/.github/workflows/cross-platform-test.yml
@@ -21,6 +21,7 @@ jobs:
         uses: actions/checkout@v3
         with:
           fetch-depth: 0
+          submodules: true
 
       - name: Setup Node.js environment
         uses: actions/setup-node@v3
diff --git a/.github/workflows/dvc-cli-output-test.yml b/.github/workflows/dvc-cli-output-test.yml
index 0c168f4a8f..a1b43604c6 100644
--- a/.github/workflows/dvc-cli-output-test.yml
+++ b/.github/workflows/dvc-cli-output-test.yml
@@ -16,6 +16,7 @@ jobs:
         uses: actions/checkout@v3
         with:
           fetch-depth: 0
+          submodules: true
 
       - name: Setup Node.js environment
         uses: actions/setup-node@v3
diff --git a/.gitmodules b/.gitmodules
new file mode 100644
index 0000000000..ae8e88b6ed
--- /dev/null
+++ b/.gitmodules
@@ -0,0 +1,3 @@
+[submodule "demo"]
+	path = demo
+	url = https://github.com/iterative/vscode-dvc-demo
diff --git a/demo b/demo
new file mode 160000
index 0000000000..461d2a8807
--- /dev/null
+++ b/demo
@@ -0,0 +1 @@
+Subproject commit 461d2a88079aa49255193816417265bd995cf28a
diff --git a/demo/.dvc/.gitignore b/demo/.dvc/.gitignore
deleted file mode 100644
index 528f30c71c..0000000000
--- a/demo/.dvc/.gitignore
+++ /dev/null
@@ -1,3 +0,0 @@
-/config.local
-/tmp
-/cache
diff --git a/demo/.dvc/config b/demo/.dvc/config
deleted file mode 100644
index fde9c420eb..0000000000
--- a/demo/.dvc/config
+++ /dev/null
@@ -1,4 +0,0 @@
-[core]
-    remote = storage
-['remote "storage"']
-    url = https://remote.dvc.org/mnist-vscode
diff --git a/demo/.dvcignore b/demo/.dvcignore
deleted file mode 100644
index 816e5ba9bf..0000000000
--- a/demo/.dvcignore
+++ /dev/null
@@ -1,5 +0,0 @@
-# Add patterns of files dvc should ignore, which could improve
-# the performance. Learn more at
-# https://dvc.org/doc/user-guide/dvcignore
-
-.env/*
diff --git a/demo/.gitignore b/demo/.gitignore
deleted file mode 100644
index 83dd11a9a8..0000000000
--- a/demo/.gitignore
+++ /dev/null
@@ -1,7 +0,0 @@
-/.vscode/settings.json
-.env
-/model.pt
-/training_metrics
-/misclassified.jpg
-/predictions.json
-
diff --git a/demo/.vscode/extensions.json b/demo/.vscode/extensions.json
deleted file mode 100644
index 328baf33d6..0000000000
--- a/demo/.vscode/extensions.json
+++ /dev/null
@@ -1,3 +0,0 @@
-{
-	"recommendations": ["ms-python.python"]
-}
diff --git a/demo/data/MNIST/.gitignore b/demo/data/MNIST/.gitignore
deleted file mode 100644
index 55ff1d08fa..0000000000
--- a/demo/data/MNIST/.gitignore
+++ /dev/null
@@ -1 +0,0 @@
-/raw
diff --git a/demo/data/MNIST/raw.dvc b/demo/data/MNIST/raw.dvc
deleted file mode 100644
index c50a83a000..0000000000
--- a/demo/data/MNIST/raw.dvc
+++ /dev/null
@@ -1,5 +0,0 @@
-outs:
-- md5: 8c257df187855c681f88bde92d721ccd.dir
-  size: 66544770
-  nfiles: 8
-  path: raw
diff --git a/demo/dvc.lock b/demo/dvc.lock
deleted file mode 100644
index 3bab9240d7..0000000000
--- a/demo/dvc.lock
+++ /dev/null
@@ -1,34 +0,0 @@
-schema: '2.0'
-stages:
-  train:
-    cmd: python train.py
-    deps:
-    - path: data/MNIST
-      md5: 0aed307494600d178fbdc0d000d6db38.dir
-      size: 66544866
-      nfiles: 10
-    - path: train.py
-      md5: 90f29a92c178927514c7f4d61a984a8a
-      size: 4865
-    params:
-      params.yaml:
-        epochs: 15
-        lr: 0.003
-        weight_decay: 0
-    outs:
-    - path: misclassified.jpg
-      md5: 5edd7dd13144d95ef72e270570d9d338
-      size: 32829
-    - path: model.pt
-      md5: 38126781764ca9fb04496ca2c2173056
-      size: 439383
-    - path: predictions.json
-      md5: 0aa0e279e904572c28c1203ebfa41b29
-      size: 310000
-    - path: training_metrics
-      md5: 5abc8d18d6b57bd513acf95e55e2755a.dir
-      size: 947
-      nfiles: 2
-    - path: training_metrics.json
-      md5: 2a592caac70651d359b2331ff674beec
-      size: 69
diff --git a/demo/dvc.yaml b/demo/dvc.yaml
deleted file mode 100644
index 434013cca2..0000000000
--- a/demo/dvc.yaml
+++ /dev/null
@@ -1,22 +0,0 @@
-stages:
-  train:
-    cmd: python train.py
-    deps:
-      - data/MNIST
-      - train.py
-    params:
-      - params.yaml:
-    outs:
-      - model.pt:
-          checkpoint: true
-    metrics:
-      - training_metrics.json:
-          persist: true
-          cache: false
-    plots:
-      - training_metrics
-      - misclassified.jpg
-      - predictions.json:
-          template: confusion
-          x: actual
-          y: predicted
diff --git a/demo/params.yaml b/demo/params.yaml
deleted file mode 100644
index a90973e184..0000000000
--- a/demo/params.yaml
+++ /dev/null
@@ -1,3 +0,0 @@
-lr: 0.003
-weight_decay: 0
-epochs: 15
diff --git a/demo/requirements.txt b/demo/requirements.txt
deleted file mode 100644
index fa81e540e2..0000000000
--- a/demo/requirements.txt
+++ /dev/null
@@ -1,3 +0,0 @@
-dvc[s3]==2.30.0
-torch==1.12.0
-torchvision==0.13.0
\ No newline at end of file
diff --git a/demo/train.py b/demo/train.py
deleted file mode 100644
index 03ba1f72f2..0000000000
--- a/demo/train.py
+++ /dev/null
@@ -1,163 +0,0 @@
-"""Model training and evaluation."""
-import json
-import os
-
-import numpy as np
-import torch
-import torch.nn.functional as F
-import torchvision
-
-from dvclive import Live
-from PIL import Image
-from ruamel.yaml import YAML
-
-
-def transform(dataset):
-    """Get inputs and targets from dataset."""
-    x = dataset.data.reshape(len(dataset.data), 1, 28, 28)/255
-    y = dataset.targets
-    return x, y
-
-
-def train(model, x, y, lr, weight_decay):
-    """Train a single epoch."""
-    model.train()
-    criterion = torch.nn.CrossEntropyLoss()
-    optimizer = torch.optim.Adam(model.parameters(), lr=lr,
-                                 weight_decay=weight_decay)
-    y_pred = model(x)
-    loss = criterion(y_pred, y)
-    optimizer.zero_grad()
-    loss.backward()
-    optimizer.step()
-
-
-def predict(model, x):
-    """Get model prediction scores."""
-    model.eval()
-    with torch.no_grad():
-        y_pred = model(x)
-    return y_pred
-
-
-def get_metrics(y, y_pred, y_pred_label):
-    """Get loss and accuracy metrics."""
-    metrics = {}
-    criterion = torch.nn.CrossEntropyLoss()
-    metrics["loss"] = criterion(y_pred, y).item()
-    metrics["acc"] = (y_pred_label == y).sum().item()/len(y)
-    return metrics
-
-
-def evaluate(model, x, y):
-    """Evaluate model and save metrics."""
-    scores = predict(model, x)
-    _, labels = torch.max(scores, 1)
-    actual = [int(v) for v in y]
-    predicted = [int(v) for v in labels]
-    predictions = [{
-                    "actual": int(actual),
-                    "predicted": int(predicted)
-                   } for actual, predicted in zip(actual, predicted)]
-    with open("predictions.json", "w") as f:
-        json.dump(predictions, f)
-
-    metrics = get_metrics(y, scores, labels)
-
-    return metrics, predictions
-
-def get_confusion_image(predictions, dataset):
-    confusion = {}
-    for n, pred in enumerate(predictions):
-        actual = pred["actual"]
-        predicted = pred["predicted"]
-        image = np.array(dataset[n][0]) / 255
-        confusion[(actual, predicted)] = image
-
-    max_i, max_j = 0, 0
-    for (i, j) in confusion:
-        if i > max_i:
-            max_i = i
-        if j > max_j:
-            max_j = j
-
-    frame_size = 30
-    image_shape = (28, 28)
-    incorrect_color = np.array((255, 100, 100), dtype="uint8")
-    label_color = np.array((100, 100, 240), dtype="uint8")
-
-    out_matrix = np.ones(shape=((max_i+2) * frame_size, (max_j+2) * frame_size, 3), dtype="uint8") * 240
-
-    for i in range(max_i+1):
-        if (i, i) in confusion:
-            image = confusion[(i, i)]
-            xs = (i + 1) * frame_size + 1
-            xe = (i + 2) * frame_size - 1
-            ys = 1
-            ye = frame_size - 1
-            for c in range(3):
-                out_matrix[xs:xe, ys:ye, c] = (1 - image) * label_color[c]
-                out_matrix[ys:ye, xs:xe, c] = (1 - image) * label_color[c]
-
-    for (i, j) in confusion:
-        image = confusion[(i, j)]
-        assert image.shape == image_shape
-        xs = (i + 1) * frame_size + 1
-        xe = (i + 2) * frame_size - 1
-        ys = (j + 1) * frame_size + 1
-        ye = (j + 2) * frame_size - 1
-        assert (xe-xs, ye-ys) == image_shape
-        if i != j:
-            for c in range(3):
-                out_matrix[xs:xe, ys:ye, c] = (1 - image) * incorrect_color[c]
-
-    return out_matrix
-
-
-def main():
-    """Train model and evaluate on test data."""
-    torch.manual_seed(473987)
-
-    model = torch.nn.Sequential(
-        torch.nn.Flatten(),
-        torch.nn.Linear(28 * 28, 128),
-        torch.nn.ReLU(),
-        torch.nn.Dropout(0.1),
-        torch.nn.Linear(128, 64),
-        torch.nn.ReLU(),
-        torch.nn.Dropout(0.1),
-        torch.nn.Linear(64, 10),
-    )
-    live = Live("training_metrics", report=None)
-
-    # Load model.
-    if os.path.exists("model.pt"):
-        model.load_state_dict(torch.load("model.pt"))
-
-    # Load params.
-    yaml = YAML(typ="safe")
-    with open("params.yaml") as f:
-        params = yaml.load(f)
-
-    # Load train and test data.
-    mnist_train = torchvision.datasets.MNIST("data", download=True)
-    x_train, y_train = transform(mnist_train)
-    mnist_test = torchvision.datasets.MNIST("data", download=True, train=False)
-    x_test, y_test = transform(mnist_test)
-
-    # Iterate over training epochs.
-    for epoch in range(params["epochs"]):
-        print(f"EPOCH: {epoch + 1} / {params['epochs']}")
-        train(model, x_train, y_train, params["lr"], params["weight_decay"])
-        torch.save(model.state_dict(), "model.pt")
-        # Evaluate and checkpoint.
-        metrics, predictions = evaluate(model, x_test, y_test)
-        for k, v in metrics.items():
-            live.log(k, v)
-        missclassified = get_confusion_image(predictions, mnist_test)
-        Image.fromarray(missclassified).save("misclassified.jpg")
-        live.next_step()
-
-
-if __name__ == "__main__":
-    main()
diff --git a/demo/training_metrics.json b/demo/training_metrics.json
deleted file mode 100644
index 486cd24a07..0000000000
--- a/demo/training_metrics.json
+++ /dev/null
@@ -1,5 +0,0 @@
-{
-  "step": 14,
-  "loss": 0.9596208930015564,
-  "acc": 0.7735
-}
diff --git a/extension/package.json b/extension/package.json
index 9e16a077bc..9f4d12d558 100644
--- a/extension/package.json
+++ b/extension/package.json
@@ -1412,7 +1412,7 @@
             },
             "completionEvents": [
               "onLink:https://github.com/iterative/example-get-started",
-              "onLink:https://github.com/iterative/vscode-dvc/tree/main/demo",
+              "onLink:https://github.com/iterative/vscode-dvc-demo",
               "onLink:https://dvc.org/doc/dvclive"
             ]
           },
diff --git a/extension/resources/walkthrough/setup-project.md b/extension/resources/walkthrough/setup-project.md
index 6e2aa1e31c..281c33bb39 100644
--- a/extension/resources/walkthrough/setup-project.md
+++ b/extension/resources/walkthrough/setup-project.md
@@ -5,8 +5,8 @@
 
 💡 Check out the
 [DVC Get Started](https://github.com/iterative/example-get-started) or
-[Extension Demo](https://github.com/iterative/vscode-dvc/tree/main/demo)
-projects to quickly try the extension.
+[Extension Demo](https://github.com/iterative/vscode-dvc-demo) projects to
+quickly try the extension.
 
 To quickly setup a new DVC project run
 [`dvc exp init -i`](https://dvc.org/doc/command-reference/exp/init#example-interactive-mode)
diff --git a/extension/src/cli/git/constants.ts b/extension/src/cli/git/constants.ts
index 61c5575ad0..364b6b4807 100644
--- a/extension/src/cli/git/constants.ts
+++ b/extension/src/cli/git/constants.ts
@@ -1,11 +1,13 @@
 import { join } from 'path'
 
-export const DOT_GIT = '.git'
-export const DOT_GIT_HEAD = join(DOT_GIT, 'HEAD')
-export const DOT_GIT_INDEX = join(DOT_GIT, 'index')
-export const GIT_REFS = join(DOT_GIT, 'refs')
-export const GIT_LOGS_REFS = join(DOT_GIT, 'logs', 'refs')
-export const HEADS_GIT_REFS = join(GIT_REFS, 'heads')
+export const gitPath = {
+  DOT_GIT: '.git',
+  DOT_GIT_HEAD: 'HEAD',
+  DOT_GIT_INDEX: 'index',
+  GIT_LOGS_REFS: join('logs', 'ref'),
+  GIT_REFS: 'refs',
+  HEADS_GIT_REFS: 'heads'
+} as const
 
 export enum Command {
   ADD = 'add',
diff --git a/extension/src/cli/git/executor.test.ts b/extension/src/cli/git/executor.test.ts
index 5f5101c6c2..7e1b129e70 100644
--- a/extension/src/cli/git/executor.test.ts
+++ b/extension/src/cli/git/executor.test.ts
@@ -4,6 +4,7 @@ import { GitExecutor } from './executor'
 import { createProcess } from '../../processExecution'
 import { CliResult, CliStarted } from '..'
 import { getMockedProcess } from '../../test/util/jest'
+import { standardizePath } from '../../fileSystem/path'
 
 jest.mock('vscode')
 jest.mock('@hediet/std/disposable')
@@ -38,9 +39,10 @@ describe('GitExecutor', () => {
     } as unknown as EventEmitter<CliStarted>
   })
 
+  const cwd = standardizePath(__dirname) as string
+
   describe('pushBranch', () => {
     it('should call createProcess with the correct parameters to push a branch', async () => {
-      const cwd = __dirname
       const branchName = 'my-branch'
       mockedCreateProcess.mockReturnValueOnce(
         getMockedProcess(
@@ -57,7 +59,6 @@ describe('GitExecutor', () => {
     })
 
     it('should call createProcess with the correct parameters to push the current branch', async () => {
-      const cwd = __dirname
       mockedCreateProcess.mockReturnValueOnce(
         getMockedProcess('Everything up-to-date')
       )
@@ -73,7 +74,6 @@ describe('GitExecutor', () => {
 
   describe('stageAndCommit', () => {
     it('should call createProcess with the correct parameters to stage all files and then commit', async () => {
-      const cwd = __dirname
       const message = 'best experiment'
       mockedCreateProcess.mockReturnValueOnce(getMockedProcess(cwd))
       mockedCreateProcess
diff --git a/extension/src/cli/git/index.ts b/extension/src/cli/git/index.ts
index d54c33a51d..d8be852428 100644
--- a/extension/src/cli/git/index.ts
+++ b/extension/src/cli/git/index.ts
@@ -1,11 +1,12 @@
 import { Command, Flag } from './constants'
 import { getOptions } from './options'
 import { Cli } from '..'
+import { standardizePath } from '../../fileSystem/path'
 
 export class GitCli extends Cli {
-  public getGitRepositoryRoot(cwd: string) {
+  public async getGitRepositoryRoot(cwd: string) {
     const options = getOptions(cwd, Command.REV_PARSE, Flag.SHOW_TOPLEVEL)
 
-    return this.executeProcess(options)
+    return standardizePath(await this.executeProcess(options)) as string
   }
 }
diff --git a/extension/src/experiments/data/constants.ts b/extension/src/experiments/data/constants.ts
index 0875cd0383..77f7a0435e 100644
--- a/extension/src/experiments/data/constants.ts
+++ b/extension/src/experiments/data/constants.ts
@@ -1,6 +1,6 @@
 import { join } from 'path'
-import { GIT_LOGS_REFS, GIT_REFS } from '../../cli/git/constants'
+import { gitPath } from '../../cli/git/constants'
 
-export const EXPERIMENTS_GIT_REFS = join(GIT_REFS, 'exps')
-export const EXPERIMENTS_GIT_LOGS_REFS = join(GIT_LOGS_REFS, 'exps')
+export const EXPERIMENTS_GIT_REFS = join(gitPath.GIT_REFS, 'exps')
+export const EXPERIMENTS_GIT_LOGS_REFS = join(gitPath.GIT_LOGS_REFS, 'exps')
 export const EXPERIMENTS_GIT_REFS_EXEC = join(EXPERIMENTS_GIT_REFS, 'exec')
diff --git a/extension/src/experiments/data/index.ts b/extension/src/experiments/data/index.ts
index 6a4d1d6f97..8ebc383d7c 100644
--- a/extension/src/experiments/data/index.ts
+++ b/extension/src/experiments/data/index.ts
@@ -14,7 +14,8 @@ import { AvailableCommands, InternalCommands } from '../../commands/internal'
 import { ExperimentsOutput } from '../../cli/dvc/contract'
 import { BaseData } from '../../data'
 import { ExperimentFlag } from '../../cli/dvc/constants'
-import { DOT_GIT, DOT_GIT_HEAD, HEADS_GIT_REFS } from '../../cli/git/constants'
+import { gitPath } from '../../cli/git/constants'
+import { getGitPath } from '../../fileSystem'
 
 export const QUEUED_EXPERIMENT_PATH = join('.dvc', 'tmp', 'exps')
 
@@ -80,16 +81,18 @@ export class ExperimentsData extends BaseData<ExperimentsOutput> {
       AvailableCommands.GIT_GET_REPOSITORY_ROOT,
       this.dvcRoot
     )
+
+    const dotGitPath = getGitPath(gitRoot, gitPath.DOT_GIT)
     const watchedRelPaths = [
-      DOT_GIT_HEAD,
+      gitPath.DOT_GIT_HEAD,
       EXPERIMENTS_GIT_REFS,
       EXPERIMENTS_GIT_LOGS_REFS,
-      HEADS_GIT_REFS
+      gitPath.HEADS_GIT_REFS
     ]
 
     this.dispose.track(
       createFileSystemWatcher(
-        getRelativePattern(join(gitRoot, DOT_GIT), '**'),
+        getRelativePattern(dotGitPath, '**'),
         (path: string) => {
           if (path.includes(EXPERIMENTS_GIT_REFS_EXEC)) {
             return
diff --git a/extension/src/fileSystem/index.ts b/extension/src/fileSystem/index.ts
index 6eb7f0cd89..efbb3e4da1 100644
--- a/extension/src/fileSystem/index.ts
+++ b/extension/src/fileSystem/index.ts
@@ -13,6 +13,7 @@ import { Uri } from 'vscode'
 import { standardizePath } from './path'
 import { definedAndNonEmpty } from '../util/array'
 import { Logger } from '../common/logger'
+import { gitPath } from '../cli/git/constants'
 
 export const exists = (path: string): boolean => existsSync(path)
 
@@ -63,6 +64,35 @@ export const findAbsoluteDvcRootPath = async (
   return [absoluteRoot]
 }
 
+// .git inside a submodule is a file with the following content: `gitdir: ../.git/modules/demo`
+const findDotGitDir = (gitRoot: string) => {
+  const dotGitPath = join(gitRoot, gitPath.DOT_GIT)
+
+  const isSubmodule = lstatSync(dotGitPath).isFile()
+  if (isSubmodule) {
+    const dotGitAsFileContent = readFileSync(dotGitPath, 'utf8')
+    const gitDirPrefix = 'gitdir: '
+    const gitDirLine = dotGitAsFileContent
+      .split(/\r?\n/)
+      .find(line => line.indexOf(gitDirPrefix) === 0)
+    return resolve(gitRoot, ...(gitDirLine?.slice(8).split('/') || []))
+  }
+  return dotGitPath
+}
+
+const gitRootGitDir: { [key: string]: string } = {}
+
+export const getGitPath = (gitRoot: string, path: string) => {
+  const gitDir = gitRootGitDir[gitRoot] || findDotGitDir(gitRoot)
+  gitRootGitDir[gitRoot] = gitDir
+
+  if (path === gitPath.DOT_GIT) {
+    return gitDir
+  }
+
+  return join(gitDir, path)
+}
+
 export const isSameOrChild = (root: string, path: string) => {
   const rel = relative(root, path)
   return !rel.startsWith('..')
diff --git a/extension/src/repository/data/index.ts b/extension/src/repository/data/index.ts
index 26b09201e7..ae22c759c1 100644
--- a/extension/src/repository/data/index.ts
+++ b/extension/src/repository/data/index.ts
@@ -1,4 +1,3 @@
-import { join } from 'path'
 import { Event, EventEmitter } from 'vscode'
 import { AvailableCommands, InternalCommands } from '../../commands/internal'
 import { ProcessManager } from '../../processManager'
@@ -12,8 +11,9 @@ import {
   EXPERIMENTS_GIT_REFS
 } from '../../experiments/data/constants'
 import { DeferredDisposable } from '../../class/deferred'
-import { DOT_GIT } from '../../cli/git/constants'
+import { gitPath } from '../../cli/git/constants'
 import { DataStatusOutput, DvcError } from '../../cli/dvc/contract'
+import { getGitPath } from '../../fileSystem'
 
 export type Data = {
   dataStatus: DataStatusOutput | DvcError
@@ -128,7 +128,10 @@ export class RepositoryData extends DeferredDisposable {
 
     this.dispose.track(
       createFileSystemWatcher(
-        getRelativePattern(join(gitRoot, DOT_GIT), '{HEAD,index}'),
+        getRelativePattern(
+          getGitPath(gitRoot, gitPath.DOT_GIT),
+          '{HEAD,index}'
+        ),
         (path: string) => {
           if (!path) {
             return
diff --git a/extension/src/test/suite/experiments/data/index.test.ts b/extension/src/test/suite/experiments/data/index.test.ts
index 7f72706a3c..2f9f84e7fa 100644
--- a/extension/src/test/suite/experiments/data/index.test.ts
+++ b/extension/src/test/suite/experiments/data/index.test.ts
@@ -1,4 +1,4 @@
-import { join, resolve, sep } from 'path'
+import { join, sep } from 'path'
 import { afterEach, beforeEach, describe, it, suite } from 'mocha'
 import { EventEmitter, FileSystemWatcher, RelativePattern } from 'vscode'
 import { expect } from 'chai'
@@ -25,7 +25,8 @@ import {
 import { buildExperimentsData, buildExperimentsDataDependencies } from '../util'
 import { ExperimentFlag } from '../../../../cli/dvc/constants'
 import { EXPERIMENTS_GIT_LOGS_REFS } from '../../../../experiments/data/constants'
-import { DOT_GIT_HEAD } from '../../../../cli/git/constants'
+import { gitPath } from '../../../../cli/git/constants'
+import { getGitPath } from '../../../../fileSystem'
 
 suite('Experiments Data Test Suite', () => {
   const disposable = Disposable.fn()
@@ -159,7 +160,7 @@ suite('Experiments Data Test Suite', () => {
 
     it('should watch the .git directory for updates', async () => {
       const mockNow = getMockNow()
-      const gitRoot = resolve(dvcDemoPath, '..')
+      const gitRoot = dvcDemoPath
 
       const mockExecuteCommand = (command: CommandId) => {
         if (command === AvailableCommands.GIT_GET_REPOSITORY_ROOT) {
@@ -186,7 +187,7 @@ suite('Experiments Data Test Suite', () => {
         data.onDidUpdate(() => resolve(undefined))
       )
 
-      await Watcher.fireWatcher(join(gitRoot, DOT_GIT_HEAD))
+      await Watcher.fireWatcher(getGitPath(gitRoot, gitPath.DOT_GIT_HEAD))
       await dataUpdatedEvent
 
       expect(managedUpdateSpy).to.be.called
diff --git a/extension/src/test/suite/fileSystem/index.test.ts b/extension/src/test/suite/fileSystem/index.test.ts
new file mode 100644
index 0000000000..6397ec9821
--- /dev/null
+++ b/extension/src/test/suite/fileSystem/index.test.ts
@@ -0,0 +1,53 @@
+import { join, resolve } from 'path'
+import { afterEach, beforeEach, describe, it, suite } from 'mocha'
+import { expect } from 'chai'
+import { Disposable } from '@hediet/std/disposable'
+import { restore } from 'sinon'
+import { dvcDemoPath } from '../../util'
+import { getGitPath } from '../../../fileSystem'
+import { gitPath } from '../../../cli/git/constants'
+import { GitReader } from '../../../cli/git/reader'
+import { standardizePath } from '../../../fileSystem/path'
+import { EXPERIMENTS_GIT_REFS } from '../../../experiments/data/constants'
+
+suite('File System Test Suite', () => {
+  const disposable = Disposable.fn()
+
+  beforeEach(() => {
+    restore()
+  })
+
+  afterEach(() => {
+    disposable.dispose()
+  })
+
+  describe('getGitPath', () => {
+    it('should get the expected paths for the demo repository (submodule)', async () => {
+      const reader = disposable.track(new GitReader())
+      const root = await reader.getGitRepositoryRoot(__dirname)
+      const submoduleDotGit = standardizePath(
+        resolve(root, gitPath.DOT_GIT, 'modules', 'demo')
+      ) as string
+
+      const dotGitPath = getGitPath(dvcDemoPath, gitPath.DOT_GIT)
+      expect(dotGitPath).to.equal(submoduleDotGit)
+
+      const expRefPaths = getGitPath(dvcDemoPath, EXPERIMENTS_GIT_REFS)
+      expect(expRefPaths).to.equal(join(submoduleDotGit, EXPERIMENTS_GIT_REFS))
+    })
+
+    it('should get the expected paths for this project', async () => {
+      const reader = disposable.track(new GitReader())
+      const root = await reader.getGitRepositoryRoot(__dirname)
+      const rootDotGit = standardizePath(
+        resolve(root, gitPath.DOT_GIT)
+      ) as string
+
+      const dotGitPath = getGitPath(root, gitPath.DOT_GIT)
+      expect(dotGitPath).to.equal(rootDotGit)
+
+      const expRefPaths = getGitPath(root, EXPERIMENTS_GIT_REFS)
+      expect(expRefPaths).to.equal(join(rootDotGit, EXPERIMENTS_GIT_REFS))
+    })
+  })
+})
diff --git a/extension/src/test/suite/repository/data/index.test.ts b/extension/src/test/suite/repository/data/index.test.ts
index 664ac6cd64..302c54282c 100644
--- a/extension/src/test/suite/repository/data/index.test.ts
+++ b/extension/src/test/suite/repository/data/index.test.ts
@@ -1,4 +1,3 @@
-import { join, resolve } from 'path'
 import { afterEach, beforeEach, describe, it, suite } from 'mocha'
 import { expect } from 'chai'
 import { restore, spy, stub } from 'sinon'
@@ -13,7 +12,8 @@ import {
   CommandId,
   InternalCommands
 } from '../../../../commands/internal'
-import { DOT_GIT_HEAD } from '../../../../cli/git/constants'
+import { gitPath } from '../../../../cli/git/constants'
+import { getGitPath } from '../../../../fileSystem'
 
 suite('Repository Data Test Suite', () => {
   const disposable = Disposable.fn()
@@ -42,7 +42,7 @@ suite('Repository Data Test Suite', () => {
     })
 
     it('should watch the .git index and HEAD for updates', async () => {
-      const gitRoot = resolve(dvcDemoPath, '..')
+      const gitRoot = dvcDemoPath
 
       const mockExecuteCommand = (command: CommandId) => {
         if (command === AvailableCommands.GIT_GET_REPOSITORY_ROOT) {
@@ -67,7 +67,7 @@ suite('Repository Data Test Suite', () => {
         data.onDidUpdate(() => resolve(undefined))
       )
 
-      await fireWatcher(join(gitRoot, DOT_GIT_HEAD))
+      await fireWatcher(getGitPath(gitRoot, gitPath.DOT_GIT_HEAD))
       await dataUpdatedEvent
 
       expect(managedUpdateSpy).to.be.called
diff --git a/package.json b/package.json
index 6f4848f915..ce455c6740 100644
--- a/package.json
+++ b/package.json
@@ -25,7 +25,7 @@
     "build": "yarn turbo run package",
     "install-frozen-lockfile": "./scripts/install-frozen-lockfile.sh",
     "dev-server": "yarn turbo run dev --parallel",
-    "postinstall": "husky install",
+    "postinstall": "husky install && git submodule init && git submodule update",
     "storybook": "yarn workspace dvc-vscode-webview storybook",
     "build-storybook": "yarn turbo run build-storybook --filter=dvc-vscode-webview",
     "chromatic": "yarn workspace dvc-vscode-webview chromatic",