diff --git a/test/dynamo/test_repros.py b/test/dynamo/test_repros.py
index 1b9bf3c83a8..a3c4226ed6a 100644
--- a/test/dynamo/test_repros.py
+++ b/test/dynamo/test_repros.py
@@ -5912,22 +5912,6 @@ def forward(self, s0 : torch.SymInt, s1 : torch.SymInt, L_x_ : torch.Tensor):
             actual[1].untyped_storage().data_ptr(),
         )
 
-    def test_torch_compile_in_compile_frame(self):
-        # TODO(anijain2305/yanboliang) - Dont graph break on torch.compile.
-        def gn(x, c=None):
-            if c is None:
-                c = 2
-            return c * x
-
-        def outer_func(x):
-            return torch.compile(gn)(x)
-
-        compile_outer = torch.compile(outer_func, backend="eager")
-        x = torch.randn(4)
-        ref = outer_func(x)
-        res = compile_outer(x)
-        self.assertEqual(ref, res)
-
 
 instantiate_parametrized_tests(ReproTests)
 
diff --git a/torch/_dynamo/variables/builder.py b/torch/_dynamo/variables/builder.py
index bf1cbed10b8..f7ac4d073b5 100644
--- a/torch/_dynamo/variables/builder.py
+++ b/torch/_dynamo/variables/builder.py
@@ -547,6 +547,11 @@ class VariableBuilder:
         if id_dispatch is not None:
             return id_dispatch(self, value)
 
+        # Note - There are some nested values where types mismatch!
+        # We want to get those out and wrap those.
+        if is_function_or_wrapper(value):
+            value = inspect.getattr_static(value, "_torchdynamo_inline", value)
+
         # Everything else (NB: order matters!)
         if is_traceable_wrapper_subclass(value) or istype(
             value, config.traceable_tensor_subclasses
@@ -983,13 +988,6 @@ class VariableBuilder:
         elif is_lru_cache_wrapped_function(value):
             self.install_guards(GuardBuilder.TYPE_MATCH)
             return WrapperUserFunctionVariable(value, "__wrapped__", source=self.source)
-        elif is_function_or_wrapper(value) and inspect.getattr_static(
-            value, "_torchdynamo_inline", False
-        ):
-            self.install_guards(GuardBuilder.TYPE_MATCH)
-            return WrapperUserFunctionVariable(
-                value, "_torchdynamo_inline", source=self.source
-            )
         elif is_function_or_wrapper(value):
             value, attr_name = unwrap_with_attr_name_if_wrapper(value)
             # For these wrappers, Dynamo points to the wrapped function,
diff --git a/torch/_dynamo/variables/functions.py b/torch/_dynamo/variables/functions.py
index 77662e1f4b5..90c2d0665ae 100644
--- a/torch/_dynamo/variables/functions.py
+++ b/torch/_dynamo/variables/functions.py
@@ -152,6 +152,8 @@ class UserFunctionVariable(BaseUserFunctionVariable):
         assert isinstance(
             fn, (types.FunctionType, torch.jit.ScriptFunction)
         ), f"expected FunctionType found {typestr(fn)} {fn}"
+        # unpack @torch._dynamo.optimize()(fn) wrapped function
+        fn = inspect.getattr_static(fn, "_torchdynamo_inline", fn)
         self.fn: types.FunctionType = fn
 
     def as_python_constant(self):