The work of Gee and Purves helps provide a framework for understanding cultural contexts and contextual boundaries of literacy. Gee (1991) uses the term "discourse"--a socially accepted association among ways of using language that can identify one as a member of a social context--synonymously with cultural context. Purves' (1991) work supports and adds to Gee's work, although his thinking arises from the perspective of functions of curriculum as a sort of context. When defined within cultural context, the main criterion for literacy is whether the individual functions adequately within his/her cultural context. To determine the extent to which respondents from Bridget's Harbor, Newfoundland, were versed and empowered in cultural ways and in their use of literacy, researchers used data on their participation in or perception of activities/factors. Findings indicated the following: respondents were culturally thoughtful within their primary culture and functioned well within this cultural context; they had learned their culture well; they knew the social mores; they were involved in subsistence activities; they had acquired a range of skills; they engaged in meaningful literacy tasks; were active in community life; had strong family ties and many friends; and they had positive and strong self-images. Forces from the extended culture were having a negative effect. The closure of the fishery and fish plant destroyed a locale where community values were continually being professed among the community workers and removed from them a sense of community control. (Contains 14 references.) (YLB)