Rails 2.3 comes with its own gem handling. We're going to override that and replace it with support for Bundler.
NB: This may work with Rails versions lower than 2.3. The Bundler team has not tested those versions, and will not provide support for anyone on Rails older than 2.3, but feel free to try it. :)

Using Bundler with Rails 2.3

If you don't have a Rails 2.3 app yet, generate one
$ rails myapp
$ cd myapp
Insert the following code at the bottom of config/boot.rb, right above the line `Rails.boot!`
class Rails::Boot
  def run

    Rails::Initializer.class_eval do
      def load_gems
        @bundler_loaded ||= Bundler.require :default, Rails.env

Create a new file, config/preinitializer.rb, and insert the following. That is config NOT config/initializers.
  require 'rubygems'
  require 'bundler'
rescue LoadError
  raise "Could not load the bundler gem. Install it with `gem install bundler`."

if Gem::Version.new(Bundler::VERSION) <= Gem::Version.new("0.9.24")
  raise RuntimeError, "Your bundler version is too old for Rails 2.3.\n" +
   "Run `gem install bundler` to upgrade."

  # Set up load paths for all bundled gems
  ENV["BUNDLE_GEMFILE"] = File.expand_path("../../Gemfile", __FILE__)
rescue Bundler::GemNotFound
  raise RuntimeError, "Bundler couldn't find some gems.\n" +
    "Did you run `bundle install`?"
Get all config.gem declarations from your application, and place them into the Gemfile. If you have declarations in development.rb, for instance, place them in a named group. Make sure to include Rails itself and at least one source
source :gemcutter
gem 'rails', '~> 2.3.5'
gem 'sqlite3-ruby', :require => 'sqlite3'

# bundler requires these gems in all environments
# gem 'nokogiri', '1.4.2'
# gem 'geokit'

group :development do
  # bundler requires these gems in development
  # gem 'rails-footnotes'

group :test do
  # bundler requires these gems while running tests
  # gem 'rspec'
  # gem 'faker'
Learn More: Groups
Once you have everything set up, you can use script/console, script/server, and other Rake tasks as usual. From this point on, you can follow the instructions in the Rails 3 guide
$ rake db:migrate
Learn More: Rails 3
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