diff --git a/prd.json b/prd.json
index fbb4b22..92d4e6e 100644
--- a/prd.json
+++ b/prd.json
@@ -447,7 +447,7 @@
         "Verify in browser using dev-browser skill"
       ],
       "priority": 25,
-      "passes": false,
+      "passes": true,
       "notes": ""
     },
     {
diff --git a/progress.txt b/progress.txt
index 58c6e86..6249903 100644
--- a/progress.txt
+++ b/progress.txt
@@ -374,3 +374,16 @@
   - Add button styled with border-dashed for visual distinction from action buttons
   - Handles update dynamically via React Flow re-render when options array changes
 ---
+
+## 2026-01-21 - US-025
+- What was implemented: Custom VariableNode component for setting/modifying story variables
+- Files changed:
+  - src/components/editor/nodes/VariableNode.tsx - new custom node component with orange styling, editable variable name, operation dropdown, and numeric value input
+  - src/app/editor/[projectId]/FlowchartEditor.tsx - imported and registered VariableNode in nodeTypes
+- **Learnings for future iterations:**
+  - VariableNode follows same pattern as DialogueNode: NodeProps<T> typing, useReactFlow() for updates
+  - Use parseFloat() with fallback to 0 for number input handling: `parseFloat(e.target.value) || 0`
+  - Operation dropdown uses select element with options for 'set', 'add', 'subtract'
+  - Type assertion needed for select value: `e.target.value as 'set' | 'add' | 'subtract'`
+  - Use `??` (nullish coalescing) for number defaults instead of `||` to allow 0 values: `data.value ?? 0`
+---