diff --git a/src/basic_memory/cli/main.py b/src/basic_memory/cli/main.py
index b064bfa4..41a15fc7 100644
--- a/src/basic_memory/cli/main.py
+++ b/src/basic_memory/cli/main.py
@@ -14,7 +14,7 @@ __all__ = ["init", "status", "sync"]
 from basic_memory.config import config
 
 
-def setup_logging(home_dir: str = config.home, log_file: str = "basic-memory-tools.log"):
+def setup_logging(home_dir: str = config.home, log_file: str = "./basic-memory/basic-memory-tools.log"):
     """Configure logging for the application."""
 
     # Remove default handler and any existing handlers
diff --git a/src/basic_memory/mcp/tools/discussion.py b/src/basic_memory/mcp/tools/discussion.py
index d47a7e31..f6c74ce6 100644
--- a/src/basic_memory/mcp/tools/discussion.py
+++ b/src/basic_memory/mcp/tools/discussion.py
@@ -10,7 +10,6 @@ from basic_memory.schemas.memory import GraphContext, MemoryUrl
 
 
 @mcp.tool(
-    name="Build Context",
     description="Build context from a memory:// URI to continue conversations naturally.",
 )
 async def build_context(
diff --git a/src/basic_memory/models/knowledge.py b/src/basic_memory/models/knowledge.py
index 2d369478..91ba6c08 100644
--- a/src/basic_memory/models/knowledge.py
+++ b/src/basic_memory/models/knowledge.py
@@ -30,13 +30,16 @@ def generate_permalink(file_path: str) -> str:
         file_path: Original file path
         
     Returns:
-        Normalized permalink that matches validation rules
+        Normalized permalink that matches validation rules. Converts spaces and underscores
+        to hyphens for consistency.
         
     Examples:
         >>> generate_permalink("docs/My Feature.md")
         'docs/my-feature'
         >>> generate_permalink("specs/API (v2).md")
         'specs/api-v2'
+        >>> generate_permalink("design/unified_model_refactor.md")
+        'design/unified-model-refactor'
     """
     # Remove extension
     base = os.path.splitext(file_path)[0]
@@ -47,8 +50,11 @@ def generate_permalink(file_path: str) -> str:
     # Convert to lowercase
     lower_text = ascii_text.lower()
     
-    # Replace spaces and invalid chars with hyphens
-    clean_text = re.sub(r'[^a-z0-9/\-_]', '-', lower_text)
+    # First replace underscores with hyphens
+    text_with_hyphens = lower_text.replace('_', '-')
+    
+    # Replace remaining invalid chars with hyphens
+    clean_text = re.sub(r'[^a-z0-9/\-]', '-', text_with_hyphens)
     
     # Collapse multiple hyphens
     clean_text = re.sub(r'-+', '-', clean_text)
@@ -130,17 +136,17 @@ class Entity(Base):
         
         Requirements:
         1. Must be valid URI path component
-        2. Only lowercase letters, numbers, hyphens, and underscores
+        2. Only lowercase letters, numbers, and hyphens (no underscores)
         3. Path segments separated by forward slashes
         4. No leading/trailing hyphens in segments
         """
         if not value:
             raise ValueError("Permalink must not be None")
         
-        if not re.match(r'^[a-z0-9][a-z0-9\-_/]*[a-z0-9]$', value):
+        if not re.match(r'^[a-z0-9][a-z0-9\-/]*[a-z0-9]$', value):
             raise ValueError(
                 f"Invalid permalink format: {value}. "
-                "Use only lowercase letters, numbers, hyphens, and underscores."
+                "Use only lowercase letters, numbers, and hyphens."
             )
         return value
 
diff --git a/src/basic_memory/repository/search_repository.py b/src/basic_memory/repository/search_repository.py
index 0f74b61f..4fa6e8e5 100644
--- a/src/basic_memory/repository/search_repository.py
+++ b/src/basic_memory/repository/search_repository.py
@@ -74,10 +74,16 @@ class SearchRepository:
             await session.commit()
 
     def _quote_search_term(self, term: str) -> str:
-        """Add quotes if term contains special characters or /.
-            For FTS5, phrases with / need to be quoted to be treated as a single token.
+        """Add quotes if term contains special characters.
+        For FTS5, special characters and phrases need to be quoted to be treated as a single token.
         """
-        if '/' in term or '*' in term or any(c in term for c in "-"):
+        # List of special characters that need quoting
+        special_chars = ['/', '*', '-', '.', ' ', '(', ')', '[', ']', '"', "'"]
+        
+        # Check if term contains any special characters
+        if any(c in term for c in special_chars):
+            # If the term already contains quotes, escape them
+            term = term.replace('"', '""')
             return f'"{term}"'
         return term
 
@@ -229,4 +235,4 @@ class SearchRepository:
             else:
                 result = await session.execute(query)
             logger.debug("Query executed successfully")
-            return result
+            return result
\ No newline at end of file
diff --git a/src/basic_memory/services/link_resolver.py b/src/basic_memory/services/link_resolver.py
index 2047fd5d..5e71a248 100644
--- a/src/basic_memory/services/link_resolver.py
+++ b/src/basic_memory/services/link_resolver.py
@@ -123,5 +123,5 @@ class LinkResolver():
             scored_results.append((score, result))
 
         # Sort by score (lowest first) and return best
-        scored_results.sort()
+        scored_results.sort(key=lambda x: x[0], reverse=True)
         return scored_results[0][1]
diff --git a/tests/edit_file_test.py b/tests/edit_file_test.py
new file mode 100644
index 00000000..09f7721c
--- /dev/null
+++ b/tests/edit_file_test.py
@@ -0,0 +1,17 @@
+"""Test file for experimenting with edit_file."""
+
+def function_one():
+    """First test function."""
+    print("Hello from function one")
+    
+    # Some code here
+    x = 1 + 2
+    return x
+
+def function_two():
+    """Second test function."""
+    print("Hello from function two")
+    
+    # Some more code
+    y = 3 * 4
+    return y
\ No newline at end of file
diff --git a/tests/sync/test_sync_service.py b/tests/sync/test_sync_service.py
index e067c393..3288b986 100644
--- a/tests/sync/test_sync_service.py
+++ b/tests/sync/test_sync_service.py
@@ -420,7 +420,44 @@ modified: 2024-01-01
     assert doc is not None
     # File should have a checksum, even if it's from either version
     assert doc.checksum is not None
+    
+@pytest.mark.asyncio
+async def test_permalink_formatting(sync_service: SyncService, test_config: ProjectConfig, entity_service: EntityService):
+    """Test that permalinks are properly formatted during sync."""
+    
+    # Test cases with different filename formats
+    test_files = {
+    # filename -> expected permalink
+    "my_awesome_feature.md": "my-awesome-feature",
+    "MIXED_CASE_NAME.md": "mixed-case-name",
+    "spaces and_underscores.md": "spaces-and-underscores",
+    "design/model_refactor.md": "design/model-refactor",
+    "test/multiple_word_directory/feature_name.md": "test/multiple-word-directory/feature-name",
+    }
+    
+    # Create test files
+    for filename, _ in test_files.items():
+        content: str = """
+---
+type: knowledge
+created: 2024-01-01
+modified: 2024-01-01
+---
+# Test File
 
+Testing permalink generation.
+"""
+        await create_test_file(test_config.home / filename, content)
+        
+        # Run sync
+        await sync_service.sync(test_config.home)
+        
+    # Verify permalinks
+    entities = await entity_service.repository.find_all()
+    for filename, expected_permalink in test_files.items():
+        # Find entity for this file
+        entity = next(e for e in entities if e.file_path == filename)
+        assert entity.permalink == expected_permalink, f"File {filename} should have permalink {expected_permalink}"
 
 @pytest.mark.asyncio
 async def test_sync_null_checksum_cleanup(
diff --git a/tests/test_permalink_formatting.py b/tests/test_permalink_formatting.py
new file mode 100644
index 00000000..04b85547
--- /dev/null
+++ b/tests/test_permalink_formatting.py
@@ -0,0 +1,62 @@
+"""Test permalink formatting during sync."""
+import pytest
+from pathlib import Path
+
+from basic_memory.config import ProjectConfig
+from basic_memory.services import EntityService
+from basic_memory.sync.sync_service import SyncService
+
+
+async def create_test_file(path: Path, content: str = "test content") -> None:
+    """Create a test file with given content."""
+    path.parent.mkdir(parents=True, exist_ok=True)
+    path.write_text(content)
+
+
+@pytest.mark.asyncio
+async def test_permalink_formatting(
+    sync_service: SyncService, test_config: ProjectConfig, entity_service: EntityService
+):
+    """Test that permalinks are properly formatted during sync.
+    
+    This ensures:
+    - Underscores are converted to hyphens
+    - Spaces are converted to hyphens
+    - Mixed case is lowercased
+    - Directory structure is preserved
+    - Multiple directories work correctly
+    """
+    project_dir = test_config.home
+
+    # Test cases with different filename formats
+    test_cases = [
+        # filename -> expected permalink
+        ("my_awesome_feature.md", "my-awesome-feature"),
+        ("MIXED_CASE_NAME.md", "mixed-case-name"),
+        ("spaces and_underscores.md", "spaces-and-underscores"),
+        ("design/model_refactor.md", "design/model-refactor"),
+        ("test/multiple_word_directory/feature_name.md", "test/multiple-word-directory/feature-name"),
+    ]
+
+    # Create test files
+    for filename, _ in test_cases:
+        content = f"""
+---
+type: knowledge
+created: 2024-01-01
+modified: 2024-01-01
+---
+# Test File
+
+Testing permalink generation.
+"""
+        await create_test_file(project_dir / filename, content)
+
+    # Run sync
+    await sync_service.sync(test_config.home)
+
+    # Verify permalinks
+    for filename, expected_permalink in test_cases:
+        entity = await entity_service.repository.get_by_file_path(filename)
+        assert entity.permalink == expected_permalink, \
+            f"File {filename} should have permalink {expected_permalink}"
\ No newline at end of file