Looping through files in a poor way

files1.rb

Dir['*'].each do |file|
  gzip = false

  if file.match(/\.gz$/)
    use_file = file.sub(/\.gz$/)
    gzip = true
  else
    use_file = file
  end

  IO.foreach(use_file) do |line|
    #...
  end

  system("gzip #{use_file}") if gzip
end