This behavior occurs because of the way that Windows NT stores time/date stamp information. All time/dates displayed in Event Log events and files on NTFS partitions are computed as offsets to UTC (which is the same as Greenwich Mean Time [GMT]). When you select your time-zone from the Control Panel Date/Time applet, you are setting the value for UTC. The appropriate number of hours are then added or subtracted to/from the stored UTC value. This adjusted time is then displayed in any operation which reports local time.
For example, if I create a file on June 3rd, at 3:00PM local time, the timestamp on the file will always be June 3rd, 3:00PM local time regardless of daylight savings time. The time is internally saved as seconds from epoch, which can consistently be converted to GMT time.
The great thing about standards is that there are so many to choose from!
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