Some embodiments of the invention provide techniques for performing system reset and/or system restore operations. Some embodiments store a record of any changes performed to a data file stored on a virtual hard disk using differencing virtual disks that are captured over time. To restore the file to the state in which it existed at any particular point in time, embodiments of the invention may allow for rolling back the system to a differencing virtual disk captured at or before that time and setting aside blocks of the differencing virtual disk chain captured after that point. To perform a system reset, the system may be rolled back to the parent virtual hard disk, by setting aside all of the blocks of the differencing virtual disk chain. Some embodiments of the invention provide for separating information on the system into a plurality of entities, and maintaining a separate set of differencing virtual disks for each entity. For example, some embodiments may create an entity may be created for each of the operating system, applications and user data, and maintain differencing virtual disks for each over time.