W2K Group Policies and W2K Groups

Is there any way to apply a group policy to a windows 2000 group. I succeed when applying to a user or computer in the OU known as NY. Then I created a local group and a global group in this OU. The global is a member of the local. I then added a user to the global. The user was from the Users and Computers container found right under the domain. The policy will not apply to the same user. I have to put the user directly under the NY OU for the policy to take effect. Any thoughts on this? Any way to get policies to apply to a user via a W2K group ?