Awesome.

Side note: virtual 8086 mode was protected mode, or rather, implied protected mode. A task could run in virtual 8086 mode where to the task it was (mostly) looking like it was running in real mode, when in actuality the kernel was running in full protected mode.

Note that the "kernel" was never DOS. It could often actually be a so called "memory manager", like EMM386, and the actual DOS OS (the entire thing, including apps, not just the DOS "kernel") would run as a sole vm86 task, without any other tasks. The memory manager was then serving DOS with a lot of the 386 32 bit goodness through a straw, effectively.

It's very bizarre from today's (or even back then's) OS standards, and evolved that way because compatibility.