diff --git a/lib/ansible/runner/action_plugins/debug.py b/lib/ansible/runner/action_plugins/debug.py
index 61ed449624..d7fd455a80 100644
--- a/lib/ansible/runner/action_plugins/debug.py
+++ b/lib/ansible/runner/action_plugins/debug.py
@@ -39,6 +39,6 @@ class ActionModule(object):
         if 'fail' in args and utils.boolean(args['fail']):
             result = dict(failed=True, msg=args['msg'])
         else:
-            result = dict(msg=str(args['msg']))
+            result = dict(msg=args['msg'])
 
         return ReturnData(conn=conn, result=result)
diff --git a/lib/ansible/utils/__init__.py b/lib/ansible/utils/__init__.py
index 40d42ba146..639680cf1a 100644
--- a/lib/ansible/utils/__init__.py
+++ b/lib/ansible/utils/__init__.py
@@ -279,11 +279,12 @@ def parse_yaml_from_file(path):
 
 def parse_kv(args):
     ''' convert a string of key/value items to a dict '''
-
     options = {}
     if args is not None:
         # attempting to split a unicode here does bad things
-        vargs = shlex.split(str(args), posix=True)
+        args = args.encode('utf-8')
+        vargs = [x.decode('utf-8') for x in shlex.split(args, posix=True)]
+        #vargs = shlex.split(str(args), posix=True)
         for x in vargs:
             if x.find("=") != -1:
                 k, v = x.split("=",1)
diff --git a/lib/ansible/utils/template.py b/lib/ansible/utils/template.py
index 8e134f403e..84f4b4db6f 100644
--- a/lib/ansible/utils/template.py
+++ b/lib/ansible/utils/template.py
@@ -30,6 +30,7 @@ import pwd
 
 # TODO: refactor this file
 
+FILTER_PLUGINS = {}
 _LISTRE = re.compile(r"(\w+)\[(\d+)\]")
 JINJA2_OVERRIDE='#jinja2:'
 
@@ -231,6 +232,8 @@ def template(basedir, varname, vars, lookup_fatal=True, depth=0, expand_lists=Tr
     ''' templates a data structure by traversing it and substituting for other data structures '''
 
     if isinstance(varname, basestring):
+        if '{{' in varname:
+            return template_from_string(basedir, varname, vars)
         m = _varFind(basedir, varname, vars, lookup_fatal, depth, expand_lists)
         if not m:
             return varname
@@ -386,3 +389,30 @@ def template_from_file(basedir, path, vars):
         res = res + '\n'
     return template(basedir, res, vars)
 
+def _get_filter_plugins():
+    global FILTER_PLUGINS
+    if FILTER_PLUGINS is not None:
+        return FILTER_PLUGINS
+    environment = jinja2.Environment(trim_blocks=True)
+    FILTER_PLUGINS = {}
+    from ansible import utils
+    for filter_plugin in utils.plugins.filter_loader.all():
+        filters = filter_plugin.filters()
+        if not isinstance(filters, dict):
+            raise errors.AnsibleError("FilterModule.filters should return a dict.")
+        FILTER_PLUGINS.update(filters)
+    return FILTER_PLUGINS
+
+def template_from_string(basedir, data, vars):
+    ''' run a file through the (Jinja2) templating engine '''
+    if type(data) == str:
+        data = unicode(data, 'utf-8')
+    environment = jinja2.Environment(trim_blocks=True)
+    environment.filters.update(_get_filter_plugins())
+    # TODO: may need some way of using lookup plugins here seeing we aren't calling
+    # the legacy engine, lookup() as a function, perhaps?
+    environment.template_class = J2Template
+    t = environment.from_string(data)
+    res = jinja2.utils.concat(t.root_render_func(t.new_context(_jinja2_vars(basedir, vars, t.globals), shared=True)))
+    return res
+
diff --git a/test/TestPlayBook.py b/test/TestPlayBook.py
index 4d070a8d53..b95f1ca455 100644
--- a/test/TestPlayBook.py
+++ b/test/TestPlayBook.py
@@ -135,6 +135,7 @@ class TestPlaybook(unittest.TestCase):
            runner_callbacks = self.test_callbacks
        )
        result = self.playbook.run()
+       print EVENTS
        return result
 
    def test_one(self):
diff --git a/test/playbook1.yml b/test/playbook1.yml
index 677e6d32db..dbb29051dc 100644
--- a/test/playbook1.yml
+++ b/test/playbook1.yml
@@ -25,7 +25,7 @@
     action: command true
 
   - name: test basic shell, plus two ways to dereference a variable
-    action: shell echo $HOME $port {{ port }}
+    action: shell echo $HOME $port
 
   - name: test vars_files imports
     action: shell echo $duck $cow $testing