How to Drag and Drop(copy) from one panel to another panel

Question

I have two panels on a form.
One panel has some controls like buttons or images and second panel is empty. I want to drag a control from panel 1 and drop it to panel 2, but it should create a copy of control, and while dragging a rectangle should be shown of same size as control and when dropped in panel 2 the dragged shape should appear there at mouse position
Actually I want to create a simulator like thing. That has some tools in panel 1 and when someone drag and drop a tool on panel 2 it should appear there at mouse position.

Language doesn't matter may be C# or VB.NET

Answer 1

Did you try something like this ?

private void Form5_Load(object sender, EventArgs e)  
{  
    this.panel1.AllowDrop = true;  
    foreach (Control c in this.panel1.Controls)  
    {  
        c.MouseDown += new MouseEventHandler(c_MouseDown);  
    }  
    this.panel1.DragOver += new DragEventHandler(panel1_DragOver);  
    this.panel1.DragDrop += new DragEventHandler(panel1_DragDrop);  
}  

void c_MouseDown(object sender, MouseEventArgs e)  
{  
    Control c = sender as Control;  
    c.DoDragDrop(c, DragDropEffects.Move);  
}  

void panel1_DragDrop(object sender, DragEventArgs e)  
{  
    Control c = e.Data.GetData(e.Data.GetFormats()[0]) as Control;  
    if (c != null)  
    {  
        c.Location = this.panel1.PointToClient(new Point(e.X, e.Y));  
        this.panel1.Controls.Add(c);  
    }  
}  

void panel1_DragOver(object sender, DragEventArgs e)  
{  
    e.Effect = DragDropEffects.Move;  
}  

VB.NET

Private Sub Form5_Load(sender As Object, e As EventArgs)
    Me.panel1.AllowDrop = True
    For Each c As Control In Me.panel1.Controls
        c.MouseDown += New MouseEventHandler(AddressOf c_MouseDown)
    Next
    Me.panel1.DragOver += New DragEventHandler(AddressOf panel1_DragOver)
    Me.panel1.DragDrop += New DragEventHandler(AddressOf panel1_DragDrop)
End Sub

Private Sub c_MouseDown(sender As Object, e As MouseEventArgs)
    Dim c As Control = TryCast(sender, Control)
    c.DoDragDrop(c, DragDropEffects.Move)
End Sub

Private Sub panel1_DragDrop(sender As Object, e As DragEventArgs)
    Dim c As Control = TryCast(e.Data.GetData(e.Data.GetFormats()(0)), Control)
    If c IsNot Nothing Then
        c.Location = Me.panel1.PointToClient(New Point(e.X, e.Y))
        Me.panel1.Controls.Add(c)
    End If
End Sub

Private Sub panel1_DragOver(sender As Object, e As DragEventArgs)
    e.Effect = DragDropEffects.Move
End Sub

Source

Answer 2

Am changing a little of code of @Shim. Here is the updated code in which a copy of your control will be placed in another panel

Random rnd = new Random();

private void Form5_Load(object sender, EventArgs e)  
{  
    this.panel1.AllowDrop = true;  
    foreach (Control c in this.panel1.Controls)  
    {  
        c.MouseDown += new MouseEventHandler(c_MouseDown);  
    }  
    this.panel1.DragOver += new DragEventHandler(panel1_DragOver);  
    this.panel1.DragDrop += new DragEventHandler(panel1_DragDrop);  
}  

void c_MouseDown(object sender, MouseEventArgs e)  
{  
    Control c = sender as Control;  
    c.DoDragDrop(c, DragDropEffects.Move);  
}  

void panel1_DragDrop(object sender, DragEventArgs e)  
{  
    Control c = e.Data.GetData(e.Data.GetFormats()[0]) as Control;
    // Here, you get a copy of your drag drop button and dynamically new button is created  
    Button btn = new Button();
    btn.Name = "Button" + rnd.Next();
    btn.Size = c.Size;
    if (c != null)  
    {  
        // Add the newly created button to you Panel
        btn.Location = this.panel1.PointToClient(new Point(e.X, e.Y));  
        this.panel1.Controls.Add(btn);  
    }  
}  

void panel1_DragOver(object sender, DragEventArgs e)  
{  
    e.Effect = DragDropEffects.Move;  
}