diff --git a/Dapper/SqlMapper.Settings.cs b/Dapper/SqlMapper.Settings.cs
index c19835c11..84468cba1 100644
--- a/Dapper/SqlMapper.Settings.cs
+++ b/Dapper/SqlMapper.Settings.cs
@@ -78,6 +78,15 @@ public static void SetDefaults()
             /// <summary>
             /// Indicates whether nulls in data are silently ignored (default) vs actively applied and assigned to members
             /// </summary>
+            /// <remarks>
+            /// Null-handling contract for custom type handlers when reading: by default a database null never reaches
+            /// <see cref="ITypeHandler.Parse"/>; the member keeps its default value (this also applies to scalar results,
+            /// e.g. <c>QuerySingle&lt;T?&gt;</c>). When this setting is <c>true</c>, a null column assigned to a member whose
+            /// type has a registered handler is passed to the handler as <see cref="DBNull.Value"/>, so the handler can
+            /// decide what null means (for example an "assigned, but null" wrapper). Handlers must therefore tolerate
+            /// <see cref="DBNull"/> when this setting is enabled. When writing, a null parameter value is passed to
+            /// <see cref="ITypeHandler.SetValue"/> as <c>null</c> regardless of this setting.
+            /// </remarks>
             public static bool ApplyNullValues { get; set; }
 
             /// <summary>
diff --git a/Dapper/SqlMapper.cs b/Dapper/SqlMapper.cs
index 8f3956cab..27c6fa113 100644
--- a/Dapper/SqlMapper.cs
+++ b/Dapper/SqlMapper.cs
@@ -3648,6 +3648,21 @@ private static void GenerateDeserializerFromMap(Type type, DbDataReader reader,
                     {
                         LoadDefaultValue(il, item.MemberType);
                     }
+                    else if (applyNullSetting && typeHandlers.ContainsKey(memberType))
+                    {
+                        il.Emit(OpCodes.Ldsfld, typeof(DBNull).GetField(nameof(DBNull.Value))!);
+#pragma warning disable 618
+                        il.EmitCall(OpCodes.Call, typeof(TypeHandlerCache<>).MakeGenericType(memberType).GetMethod(nameof(TypeHandlerCache<int>.Parse))!, null);
+#pragma warning restore 618
+                        if (item.Property is not null)
+                        {
+                            il.Emit(type.IsValueType ? OpCodes.Call : OpCodes.Callvirt, DefaultTypeMap.GetPropertySetterOrThrow(item.Property, type));
+                        }
+                        else
+                        {
+                            il.Emit(OpCodes.Stfld, item.Field!);
+                        }
+                    }
                     else if (applyNullSetting && (!memberType.IsValueType || Nullable.GetUnderlyingType(memberType) is not null))
                     {
                         // can load a null with this value
diff --git a/Directory.Packages.props b/Directory.Packages.props
index 2f91a3cca..b1e42ba41 100644
--- a/Directory.Packages.props
+++ b/Directory.Packages.props
@@ -38,6 +38,7 @@
     <PackageVersion Include="RepoDb.SqlServer" Version="1.13.1" />
     <PackageVersion Include="ServiceStack.OrmLite.SqlServer" Version="10.0.6" />
     <PackageVersion Include="Snowflake.Data" Version="5.5.0" />
+    <PackageVersion Include="pengdows.crud.fakeDb" Version="2.0.5" />
     <PackageVersion Include="SqlMarshal" Version="0.5.0" />
     <PackageVersion Include="SubSonic" Version="3.0.0.4" />
     <PackageVersion Include="Susanoo.SqlServer" Version="1.2.4.2" />
diff --git a/tests/Dapper.Tests/Dapper.Tests.csproj b/tests/Dapper.Tests/Dapper.Tests.csproj
index 93b498618..e9eab6b88 100644
--- a/tests/Dapper.Tests/Dapper.Tests.csproj
+++ b/tests/Dapper.Tests/Dapper.Tests.csproj
@@ -32,6 +32,7 @@
   </ItemGroup>
 
   <ItemGroup Condition="'$(TargetFramework)' != 'net481'">
+    <PackageReference Include="pengdows.crud.fakeDb" />
     <PackageReference Include="Npgsql" />
     <PackageReference Include="Snowflake.Data" />
   </ItemGroup>
diff --git a/tests/Dapper.Tests/FakeDbTests.Issue2086.cs b/tests/Dapper.Tests/FakeDbTests.Issue2086.cs
new file mode 100644
index 000000000..c92e8184a
--- /dev/null
+++ b/tests/Dapper.Tests/FakeDbTests.Issue2086.cs
@@ -0,0 +1,97 @@
+#if !NET481
+using System;
+using System.Collections.Generic;
+using System.Data;
+using pengdows.crud.fakeDb;
+using Xunit;
+
+namespace Dapper.Tests;
+
+public sealed class FakeDbIssue2086Tests
+{
+    [Fact]
+    public void ApplyNullValuesInvokesHandlerForValueTypeMembers()
+    {
+        var oldSetting = SqlMapper.Settings.ApplyNullValues;
+        SqlMapper.Settings.ApplyNullValues = true;
+        SqlMapper.ResetTypeHandlers();
+        SqlMapper.PurgeQueryCache(); // deserializers bake in ApplyNullValues
+        SqlMapper.AddTypeHandler(new SettableStringHandler());
+        try
+        {
+            using var connection = new fakeDbConnection(new FakeDataStore());
+            connection.EnqueueReaderResult(new[]
+            {
+                new Dictionary<string, object?> { ["MiddleName"] = DBNull.Value },
+            });
+            connection.Open();
+
+            var result = connection.QuerySingle<Person>("select MiddleName");
+
+            Assert.True(result.MiddleName.IsAssigned);
+            Assert.Null(result.MiddleName.Value);
+        }
+        finally
+        {
+            SqlMapper.Settings.ApplyNullValues = oldSetting;
+            SqlMapper.ResetTypeHandlers();
+            SqlMapper.PurgeQueryCache();
+        }
+    }
+
+    [Fact]
+    public void DefaultSettingDoesNotPassDbNullToHandler()
+    {
+        var oldSetting = SqlMapper.Settings.ApplyNullValues;
+        SqlMapper.Settings.ApplyNullValues = false;
+        SqlMapper.ResetTypeHandlers();
+        SqlMapper.PurgeQueryCache(); // deserializers bake in ApplyNullValues
+        var handler = new SettableStringHandler();
+        SqlMapper.AddTypeHandler(handler);
+        try
+        {
+            using var connection = new fakeDbConnection(new FakeDataStore());
+            connection.EnqueueReaderResult(new[]
+            {
+                new Dictionary<string, object?> { ["MiddleName"] = DBNull.Value },
+            });
+            connection.Open();
+
+            var result = connection.QuerySingle<Person>("select MiddleName");
+
+            Assert.False(result.MiddleName.IsAssigned);
+            Assert.Equal(0, handler.ParseCalls);
+        }
+        finally
+        {
+            SqlMapper.Settings.ApplyNullValues = oldSetting;
+            SqlMapper.ResetTypeHandlers();
+            SqlMapper.PurgeQueryCache();
+        }
+    }
+
+    private sealed class Person
+    {
+        public Settable<string?> MiddleName { get; set; }
+    }
+
+    private struct Settable<T>
+    {
+        public bool IsAssigned { get; init; }
+        public T? Value { get; init; }
+    }
+
+    private sealed class SettableStringHandler : SqlMapper.TypeHandler<Settable<string?>>
+    {
+        public int ParseCalls { get; private set; }
+
+        public override Settable<string?> Parse(object value)
+        {
+            ParseCalls++;
+            return new() { IsAssigned = true, Value = value is DBNull ? null : (string)value };
+        }
+
+        public override void SetValue(IDbDataParameter parameter, Settable<string?> value) => parameter.Value = value.Value;
+    }
+}
+#endif