diff --git a/index.js b/index.js
index a941f2d22f..7490994e78 100644
--- a/index.js
+++ b/index.js
@@ -7,12 +7,12 @@ const { PHASE_PRODUCTION_BUILD } = require('next/constants')
 const { default: loadConfig } = require('next/dist/next-server/server/config')
 const findUp = require('find-up')
 const makeDir = require('make-dir')
-const pathExists = require('path-exists')
-const cpx = require('cpx')
+const { copy } = require('cpx')
 
 const isStaticExportProject = require('./helpers/isStaticExportProject')
 
 const pWriteFile = util.promisify(fs.writeFile)
+const pCopy = util.promisify(copy)
 
 // * Helpful Plugin Context *
 // - Between the prebuild and build steps, the project's build command is run
@@ -73,26 +73,15 @@ module.exports = {
       console.log(`** Adding next.config.js with target set to 'serverless' **`)
     }
   },
-  async onBuild({ constants }) {
+  async onBuild({ constants: { PUBLISH_DIR, FUNCTIONS_SRC = DEFAULT_FUNCTIONS_SRC } }) {
     console.log(`** Running Next on Netlify package **`)
     nextOnNetlify()
 
     // Next-on-netlify puts its files into out_functions and out_publish
     // Copy files from next-on-netlify's output to the right functions/publish dirs
-
-    // TO-DO: use FUNCTIONS_DIST when internal bug is fixed
-    const { PUBLISH_DIR } = constants
-    // if (!(await pathExists(FUNCTIONS_DIST))) {
-    //   await makeDir(FUNCTIONS_DIST)
-    // }
-    const hasPublishDir = await pathExists(PUBLISH_DIR)
-    if (!hasPublishDir) {
-      await makeDir(PUBLISH_DIR)
-    }
-
-    // TO-DO: make sure FUNCTIONS_DIST doesnt have a custom function name conflict
-    // with function names that next-on-netlify can generate
-    // cpx.copySync('out_functions/**/*', FUNCTIONS_SRC);
-    cpx.copySync('out_publish/**/*', PUBLISH_DIR)
+    await makeDir(PUBLISH_DIR)
+    await Promise.all([pCopy('out_functions/**', FUNCTIONS_SRC), pCopy('out_publish/**', PUBLISH_DIR)])
   },
 }
+
+const DEFAULT_FUNCTIONS_SRC = 'netlify-automatic-functions'
diff --git a/package.json b/package.json
index 33dfbcc0df..1299ccf21c 100644
--- a/package.json
+++ b/package.json
@@ -28,13 +28,13 @@
     "find-up": "^4.1.0",
     "make-dir": "^3.1.0",
     "next": "^9.5.3",
-    "next-on-netlify": "^2.6.0",
-    "path-exists": "^4.0.0"
+    "next-on-netlify": "^2.6.0"
   },
   "devDependencies": {
     "@netlify/eslint-config-node": "^0.3.0",
     "husky": "^4.3.0",
     "jest": "^26.6.1",
+    "path-exists": "^4.0.0",
     "prettier": "^2.1.2",
     "react": "^17.0.1",
     "react-dom": "^17.0.1",
diff --git a/test/fixtures/publish_copy_files/publish/subdir/dummy.txt b/test/fixtures/functions_copy_files/out_functions/next_random/nextJsPage.js
similarity index 100%
rename from test/fixtures/publish_copy_files/publish/subdir/dummy.txt
rename to test/fixtures/functions_copy_files/out_functions/next_random/nextJsPage.js
diff --git a/test/fixtures/publish_copy_files/subdir/dummy.txt b/test/fixtures/functions_copy_files/out_functions/next_random/next_random.js
similarity index 100%
rename from test/fixtures/publish_copy_files/subdir/dummy.txt
rename to test/fixtures/functions_copy_files/out_functions/next_random/next_random.js
diff --git a/test/index.js b/test/index.js
index d345887643..be67b695c2 100644
--- a/test/index.js
+++ b/test/index.js
@@ -137,7 +137,7 @@ describe('onBuild()', () => {
   test('runs next on netlify', async () => {
     await plugin.onBuild({
       constants: {
-        PUBLISH_DIR: '',
+        PUBLISH_DIR: '.',
       },
     })
 
@@ -155,7 +155,7 @@ describe('onBuild()', () => {
     expect(await pathExists(PUBLISH_DIR)).toBeTruthy()
   })
 
-  test('calls copySync with correct args', async () => {
+  test('copy files to the publish directory', async () => {
     await useFixture('publish_copy_files')
     const PUBLISH_DIR = 'publish'
     await plugin.onBuild({
@@ -166,4 +166,19 @@ describe('onBuild()', () => {
 
     expect(await pathExists(`${PUBLISH_DIR}/subdir/dummy.txt`)).toBeTruthy()
   })
+
+  test.each([
+    { FUNCTIONS_SRC: 'functions', resolvedFunctions: 'functions' },
+    { FUNCTIONS_SRC: undefined, resolvedFunctions: 'netlify-automatic-functions' },
+  ])('copy files to the functions directory', async ({ FUNCTIONS_SRC, resolvedFunctions }) => {
+    await useFixture('functions_copy_files')
+    await plugin.onBuild({
+      constants: {
+        FUNCTIONS_SRC,
+        PUBLISH_DIR: '.',
+      },
+    })
+
+    expect(await pathExists(`${resolvedFunctions}/next_random/next_random.js`)).toBeTruthy()
+  })
 })