a separator / folder bag machine for developing individual , folded , plastic bags . a pair of high speed separation rollers , actuated by means of a servo motor driven eccentric linkage , engages a continuous plastic web to separate individual plastic bags formed tin the web . a pair of parallel , wide belts , and a pair of similar , overlying belts , engage both sides of the separated bags and transport the bags to a plurality of folding stations . air jets at selected locations in the folder / separator controllably direct the bags through pairs of nip rolls to fold the bags along predetermined fold lines . sensors in the folder / separator sense abnormal conditions and deactivate particular fold stations to reject improperly formed bags . a two speed slowdown mechanism at the discharge end of the separator / folder slows the folded bags to facilitate downstream handling . an optional stacker and indexing conveyor automatically stacks predetermined numbers of folded bags , aligns and compresses the bags to form an easily handled stack , and conveys the formed and compressed stack to downstream apparatus for further handling .