diff --git a/src/backends/native/agent.ts b/src/backends/native/agent.ts
index ac540c3..8630b54 100644
--- a/src/backends/native/agent.ts
+++ b/src/backends/native/agent.ts
@@ -1,35 +1,60 @@
 import type { ModelClient, Message } from '../../models/types.js';
+import type { SessionStore } from '../../session/index.js';
 
 export interface NativeAgentConfig {
   modelClient: ModelClient;
   systemPrompt: string;
+  sessionStore?: SessionStore;
+  sessionId?: string;
 }
 
 export class NativeAgent {
   private modelClient: ModelClient;
   private systemPrompt: string;
+  private sessionStore?: SessionStore;
+  private sessionId: string;
   private history: Message[] = [];
 
   constructor(config: NativeAgentConfig) {
     this.modelClient = config.modelClient;
     this.systemPrompt = config.systemPrompt;
+    this.sessionStore = config.sessionStore;
+    this.sessionId = config.sessionId ?? 'default';
+
+    // Load existing history from store
+    if (this.sessionStore) {
+      this.history = this.sessionStore.getMessages(this.sessionId);
+    }
   }
 
   async process(userMessage: string): Promise<string> {
-    this.history.push({ role: 'user', content: userMessage });
+    const userMsg: Message = { role: 'user', content: userMessage };
+    this.history.push(userMsg);
+
+    if (this.sessionStore) {
+      this.sessionStore.addMessage(this.sessionId, userMsg);
+    }
 
     const response = await this.modelClient.chat({
       messages: [...this.history],
       system: this.systemPrompt,
     });
 
-    this.history.push({ role: 'assistant', content: response.content });
+    const assistantMsg: Message = { role: 'assistant', content: response.content };
+    this.history.push(assistantMsg);
+
+    if (this.sessionStore) {
+      this.sessionStore.addMessage(this.sessionId, assistantMsg);
+    }
 
     return response.content;
   }
 
   reset(): void {
     this.history = [];
+    if (this.sessionStore) {
+      this.sessionStore.clearSession(this.sessionId);
+    }
   }
 
   getHistory(): Message[] {
diff --git a/src/daemon/index.ts b/src/daemon/index.ts
index 3b3a264..b9dc44d 100644
--- a/src/daemon/index.ts
+++ b/src/daemon/index.ts
@@ -1,39 +1,111 @@
 import { Bot } from 'grammy';
 import { Lifecycle } from './lifecycle.js';
 import type { Config } from '../config/index.js';
-import { AnthropicClient } from '../models/index.js';
+import { AnthropicClient, OpenAIClient, OllamaClient, ModelRouter } from '../models/index.js';
 import { NativeAgent } from '../backends/index.js';
 import { createTelegramBot } from '../frontends/telegram/index.js';
+import { SessionStore } from '../session/index.js';
+import { HookEngine } from '../hooks/index.js';
+import { resolve } from 'path';
+import { homedir } from 'os';
+import { mkdirSync } from 'fs';
 
 export interface DaemonContext {
   config: Config;
   lifecycle: Lifecycle;
   bot: Bot;
   agent: NativeAgent;
+  sessionStore: SessionStore;
+  hookEngine: HookEngine;
+  modelRouter: ModelRouter;
 }
 
 const SYSTEM_PROMPT = `You are Flynn, a helpful personal AI assistant. You are direct, concise, and helpful. You can help with a variety of tasks including answering questions, providing information, and having conversations.
 
 Keep responses focused and avoid unnecessary verbosity. Use markdown formatting when it improves readability.`;
 
+function createModelRouter(config: Config): ModelRouter {
+  const models = config.models;
+
+  // Create default client (required)
+  const defaultClient = new AnthropicClient({
+    model: models.default.model,
+  });
+
+  // Create optional tier clients
+  let fastClient;
+  let complexClient;
+  let localClient;
+
+  if (models.fast) {
+    fastClient = new AnthropicClient({ model: models.fast.model });
+  }
+
+  if (models.complex) {
+    complexClient = new AnthropicClient({ model: models.complex.model });
+  }
+
+  if (models.local) {
+    if (models.local.provider === 'ollama') {
+      localClient = new OllamaClient({
+        model: models.local.model,
+        host: models.local.endpoint,
+      });
+    }
+  }
+
+  // Build fallback chain
+  const fallbackChain = [];
+  for (const providerName of models.fallback_chain) {
+    if (providerName === 'openai') {
+      fallbackChain.push(new OpenAIClient({ model: 'gpt-4o' }));
+    } else if (providerName === 'local' && localClient) {
+      fallbackChain.push(localClient);
+    }
+  }
+
+  return new ModelRouter({
+    default: defaultClient,
+    fast: fastClient,
+    complex: complexClient,
+    local: localClient,
+    fallbackChain,
+  });
+}
+
 export async function startDaemon(config: Config): Promise<DaemonContext> {
   const lifecycle = new Lifecycle();
 
-  // Initialize model client
-  const modelClient = new AnthropicClient({
-    model: config.models.default.model,
+  // Ensure data directory exists
+  const dataDir = resolve(homedir(), '.local/share/flynn');
+  mkdirSync(dataDir, { recursive: true });
+
+  // Initialize session store
+  const sessionStore = new SessionStore(resolve(dataDir, 'sessions.db'));
+  lifecycle.onShutdown(async () => {
+    sessionStore.close();
+    console.log('Session store closed');
   });
 
-  // Initialize native agent
+  // Initialize hook engine
+  const hookEngine = new HookEngine(config.hooks);
+
+  // Initialize model router
+  const modelRouter = createModelRouter(config);
+
+  // Initialize native agent with session persistence
   const agent = new NativeAgent({
-    modelClient,
+    modelClient: modelRouter,
     systemPrompt: SYSTEM_PROMPT,
+    sessionStore,
+    sessionId: `telegram-${config.telegram.allowed_chat_ids[0]}`,
   });
 
-  // Initialize Telegram bot
+  // Initialize Telegram bot with hook engine
   const bot = createTelegramBot({
     telegram: config.telegram,
     agent,
+    hookEngine,
   });
 
   // Register signal handlers
@@ -64,7 +136,7 @@ export async function startDaemon(config: Config): Promise<DaemonContext> {
 
   console.log('Flynn daemon started');
 
-  return { config, lifecycle, bot, agent };
+  return { config, lifecycle, bot, agent, sessionStore, hookEngine, modelRouter };
 }
 
 export { Lifecycle } from './lifecycle.js';
diff --git a/src/frontends/telegram/bot.ts b/src/frontends/telegram/bot.ts
index c1f1199..5ada652 100644
--- a/src/frontends/telegram/bot.ts
+++ b/src/frontends/telegram/bot.ts
@@ -1,11 +1,14 @@
-import { Bot, Context } from 'grammy';
+import { Bot } from 'grammy';
 import type { NativeAgent } from '../../backends/index.js';
 import type { TelegramConfig } from '../../config/index.js';
+import type { HookEngine } from '../../hooks/index.js';
 import { isAllowedChat, createMessageHandler, createResetHandler } from './handlers.js';
+import { parseConfirmationCallback } from './confirmations.js';
 
 export interface TelegramBotConfig {
   telegram: TelegramConfig;
   agent: NativeAgent;
+  hookEngine?: HookEngine;
 }
 
 export function createTelegramBot(config: TelegramBotConfig): Bot {
@@ -13,6 +16,7 @@ export function createTelegramBot(config: TelegramBotConfig): Bot {
   const handleMessage = createMessageHandler(config.agent);
   const handleReset = createResetHandler(config.agent);
   const allowedChatIds = config.telegram.allowed_chat_ids;
+  const hookEngine = config.hookEngine;
 
   // Middleware to check chat ID
   bot.use(async (ctx, next) => {
@@ -24,6 +28,34 @@ export function createTelegramBot(config: TelegramBotConfig): Bot {
     await next();
   });
 
+  // Handle confirmation callbacks
+  bot.on('callback_query:data', async (ctx) => {
+    const data = ctx.callbackQuery.data;
+    const parsed = parseConfirmationCallback(data);
+
+    if (!parsed || !hookEngine) {
+      await ctx.answerCallbackQuery({ text: 'Invalid action' });
+      return;
+    }
+
+    const resolved = hookEngine.resolveConfirmation(parsed.id, {
+      approved: parsed.approved,
+      reason: parsed.approved ? undefined : 'Denied by user',
+    });
+
+    if (resolved) {
+      await ctx.answerCallbackQuery({
+        text: parsed.approved ? '✅ Approved' : '❌ Denied',
+      });
+      await ctx.editMessageText(
+        ctx.callbackQuery.message?.text + `\n\n${parsed.approved ? '✅ Approved' : '❌ Denied'}`,
+        { parse_mode: 'Markdown' }
+      );
+    } else {
+      await ctx.answerCallbackQuery({ text: 'Confirmation expired or not found' });
+    }
+  });
+
   // Command handlers
   bot.command('start', async (ctx) => {
     await ctx.reply('Flynn is ready. Send me a message!');
@@ -35,7 +67,9 @@ export function createTelegramBot(config: TelegramBotConfig): Bot {
   });
 
   bot.command('status', async (ctx) => {
-    await ctx.reply('Flynn is running.');
+    const pending = hookEngine?.getPendingConfirmations() ?? [];
+    const statusMsg = `Flynn is running.\nPending confirmations: ${pending.length}`;
+    await ctx.reply(statusMsg);
   });
 
   // Message handler