Compile problem locating correct folder when trying to add a second web app to subdirectory

I am trying to add a second web application (www.photosofcities.com/Progress) to a subdirectory of my main web application (www.photosofcities.com). I used the Web Application Tool to indicate that the subdirectory 'Progress' is an application. I copied my source files to the Progress subdirectory, but when I try to access a page (www.photosofcities.com/Progress/Security/SignIn.aspx), it tries to compile pages from the app_code folder that exist in my primary web application (I have an app_code folder in both my primary web app and in the web app I am trying to create in the subdirectory called Progress). I think I have a problem in my web.config file in my second application - probably in the compilation section that tells where to find what to compile, but I do not know what it is.