The authors address the problem of discourse analysis, and in particular finding causal relations between facts mentioned in messages, using a detailed domain model. This work is part of the PROTEUS (Prototype Text Understanding System) project, whose objective is to understand short narrative message about equipment installed in Navy ships. Casualty reports (CASREPs) describe failures of this equipment, together with maintenance actions performed by the crew on board. To capture the domain knowledge, the authors built a model of the equipment installed on the ship (initially, the starting air system) and demonstrated its use in several aspects of language understanding. The PROTEUS system has been substantially implemented and debugged and has been publically demonstrated operating on a small set of actual CASREPs.