http://south.readthedocs.org/en/latest/releasenotes/1.0.html
"As part of providing a migration path for authors of third-party apps and libraries for Django, South will now first look for migrations in the south_migrations directory, and then fall back to the migrations directory if this is not found.
This is intended to alleviate the namespace clash between South and Django migrations; prior to this, both were looking for a directory called migrations, and so it was impossible to ship a third-party app with support for both South and Django 1.7.
The recommendation is that you move your South migrations into the south_migrations directory (existing users will not notice the change if they upgrade South first), and then start a new set of Django 1.7 migrations in a migrations directory (the default)."