The central issue addressed in this paper concerns the design of an appropriate contextual framework to support a dynamic implementation of FDG. The first part of the paper is concerned with the internal structure of the contextual framework. A particular hierarchical structure for the analysis and description of context, articulated in Connolly (2007a) and termed the Extended Model of Context (EMC), is presented as the starting-point. Alternative frameworks are considered, but all are found to have shortcomings. However, the original version of the EMC has also received some criticism. Consequently, a revised model of the EMC is proposed, in which the treatment of context is enhanced, and which is appropriate to a dynamic implementation of FDG. The application of the revised EMC not only to the grammatical model, but also to a broader discourse model, is also discussed. The next part of the paper is concerned with the interaction between the EMC and the FDG Grammatical and Conceptual Components. It is contended that all of the main types of context recognised within the EMC have a significant effect upon grammar. However, the only way in which contextual factors may directly influence the production and interpretation of discourse is through their presence in the minds of the discourse-participants. Consequently, the Conceptual Component plays a vital, mediating role in the handling of interactions between the EMC and the Grammatical Component. This point is particularly salient when considering a dynamic implementation, in which the flow of information around the model is of crucial importance. It is contended that this flow is essentially cyclic in nature.