Building hierarchy objects from flat list of parent/child

I assume you already know the parent of all items.

All you need to do is to iterate through all item of the list once and add the current item to its parent's children list. Only keep the items without parents in the target nested list.

Here is some pseudo code:

foreach Item item in flatlist
   if item.Parent != null
      Add item to item.Parent.ChildrenList
      Remove item from flatlist
   end if
end for

As for getting the parents, from what I can see in your example, you might need to parse the name and build a stack as you advance in the list.

This problems looks hard but it really isn't. A lot of people see this problem from the wrong angle; you must not try to populate every children list but rather get rid of the children items from the flat list, then it becomes easy.

Here's the function I ended up writing. I'm using MPTT to store objects, so the list is in order of the 'left' value, which basically means the parent always comes before any given item in the list. In other words, the item referenced by item.ParentID has always already been added (except in the case of top-level or root nodes).

public class TreeObject
{
    public int Id { get; set; }
    public int ParentId { get; set; }
    public string Name { get; set; }
    public IList<TreeObject> Children { get; set; } = new List<TreeObject>();
}

public IEnumerable<TreeObject> FlatToHierarchy(List<TreeObject> list)
{
    // hashtable lookup that allows us to grab references to containers based on id
    var lookup = new Dictionary<int, TreeObject>();
    // actual nested collection to return
    var nested = new List<TreeObject>();

    foreach (TreeObject item in list)
    {
        if (lookup.ContainsKey(item.ParentId))
        {
            // add to the parent's child list 
            lookup[item.ParentId].Children.Add(item);
        }
        else
        {
            // no parent added yet (or this is the first time)
            nested.Add(item);
        }
        lookup.Add(item.Id, item);
    }

    return nested;
}

and a simple test (that works in LinqPad):

void Main()
{
    var list = new List<TreeObject>() {
        new TreeObject() { Id = 1, ParentId = 0, Name = "A" },
        new TreeObject() { Id = 2, ParentId = 1, Name = "A.1" },
        new TreeObject() { Id = 3, ParentId = 1, Name = "A.2" },
        new TreeObject() { Id = 4, ParentId = 3, Name = "A.2.i" },
        new TreeObject() { Id = 5, ParentId = 3, Name = "A.2.ii" }
    };

    FlatToHierarchy(list).Dump();
}

Results:

Since I'm updating this 5 years later, here's a recursive LINQ version:

public IList<TreeObject> FlatToHierarchy(IEnumerable<TreeObject> list, int parentId = 0) {
    return (from i in list 
            where i.ParentId == parentId 
            select new TreeObject {
                Id = i.Id, 
                ParentId = i.ParentId,
                Name = i.Name,
                Children = FlatToHierarchy(list, i.Id)
            }).ToList();
}