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I must be missing something; when I open Explorer from the tools menu or via the Alt-F3 key stroke in Textpad, Explorer opens to the folder of the current document. What is it that you mean by "TextPad's Explorer"?

When I moved mine, it appeared to be nearly empty (generic entry of User Tool 1) but when I closed the customize dialog box and tried the menu button, it had the full expected content. If that's not your case, you could reset the menu tool bar from the customize window. However, you will lose any ...

And setting the General Preference, "Working folder follows active document" won't do what you're looking for?

Also, it is easy enough to move the custom tools menu out on its own. Right click on the menu bar and select customize.

Then, when the customize dialog comes up, left click on the "Tools" menu. You can then drag and drop the "External Tools" menu to the menu bar.

Right click on the tool button from your new tool menu. Select customize. The Customize dialog will open. You can then right click on the tool button again. You will see that the context has changed. You have choices to edit the button image, change the button image, display the name only, button ...