In July 1999, Jacoby was assigned as director for intelligence (J2) on the Joint Staff. His tenure began with leading the intelligence lessons learned effort to examine the operations in the Balkans and Kosovo. Operations Northern and Southern Watch continued to enforce No-Fly Zones and sanctions against Iraq. In addition, the U.S. Navy EP-3 reconnaissance aircraft was impounded by the Chinese on Hainan Island following a collision with a Chinese fighter during operations over the South China Sea and the attack on USS "Cole" took place in Aden, Yemen. This latter event prompted a fundamental change in approach to terrorism analysis and support to operating forces which was embodied in the proposed Joint Intelligence Task Force, Combating Terrorism (JITF-CT) operating under the guidance of the Joint Staff J-2 as part of the Defense Intelligence Agency. Jacoby was advocating increased funding for JITF-CT on the afternoon of September 10, 2001 with senior staff on the House Permanent Select Committee on Intelligence. He was in the Pentagon when it was attacked on September 11, 2001. He led the stand-up of JITF-CT, was active in intelligence planning for the Global War on Terrorism and military operations in Afghanistan, oversaw J-2 activities during the initial phase of combat operations in Afghanistan and was instrumental in developing and championing an operational concept called "2 Plus 7" which became the center point for U.S. operations to dismantle the Al-Qaeda organization and attack its centralized leadership and planning functions. The effort focused operations against the two leaders and the seven senior operational planners. The result was a significant degradation in the organization's capabilities. Jacoby concluded his one-year extension as Joint Staff J-2 in July 2002.