Techniques such as the norm-referenced and average score techniques, commonly used in the identification of educationally disadvantaged students, are critiqued. This study applied latent trait theory, specifically the Rasch Model, along with teacher judgments relative to the mastery of instructional/test decisions, to derive a standard setting procedure for Chapter 1 programming. Locally designed objectives-based tests, carefully matched to the mathematics curriculum and administered to students in the Des Moines Independent Community School District, were used to identify students in need of remedial assistance in mathematics as well as assessing students' overall mathematics achievement. Twenty-one Chapter 1 teachers participated in the study, 11 at the 4th and 5th grade levels and 10 at the 6th grade level. Teacher judgments of item difficulty were recorded. The study found that results of item calibration analyses confirmed stability of the item difficulty estimates for the tests and the groups of students studied. It further found that the lack of continuing remediation when the results so indicate, can potentially compound their deficiences at the succeeding grade level. Adhering to a predetermined "fixed" standard as opposed to a "floating" standard can affect a student's future learning experiences. (Author/EGS)