timezone help

[eluser]UnknownPlayer[/eluser]
I tried like this, but not showing correct time..
btw i tried this on my localhost, and i am in Serbia.

Code:

date_default_timezone_set('America/New_York');
// time() will return new york time, i will use this to store every time and date in db  
$time = now();
$timezone = 'UP1'; // serbia timezone utc + 1
$daylight_saving = TRUE;  
$local_time = unix_to_human(gmt_to_local($time, $timezone, $daylight_saving));  
echo $local_time;

I just set on $config['time_reference'] = 'gmt'.

Now it shows me 1 hour more than it should be..

What is problem ?

EDIT:
I removed daylight saving from gmt_to_local and it works, should it be ok like that ?

Now i will store users time zone at some variable and use it like this.. i think that is the way..