The objective of this chapter is to apply a procedural analysis to the demonstrative form kadhalik in Modern Standard Arabic. It is argued that the form kadhalik can function either as a demonstrative or as a discourse marker. In the first use it consists of kaaf ’al tašbiih (kaaf for simile)+distal demonstrative dhalik, while in the second use it has grammaticalised into a single semantic unit. Using corpus examples, these two uses will be differentiated as the chapter further argues that the semantic contribution of both kaaf ’al tašbiih and kadhalik as a discourse marker can be systematically accounted for in procedural terms. This explains how both terms are used to make a discourse relation explicit by encoding procedural constraints on the interpretation process. The distinction of the two uses of kadhalik in procedural terms also explains distribution patterns in corpus data.