With custom fields for CONTACTS, you can create folders and re-order the folders and this ordering of the folders is reflected under the CONTACTS. It works perfectly for CONTACTS.

However, the same is not true for CUSTOM OBJECTS. I have gone into custom fields and created folders for information and re-ordered the list of folders. When I then open the custom object, the sort order is different. It's important that sorting folders for custom objects is reflected within the custom object itself.

I've attached two screenshots. One is showing the sort order of a custom object under custom fields, the other showing the sort order of the folders within the custom object. As you can see, the sort order within the custom object is a reflection of the folder sort order created under custom fields.