diff --git a/Strata/DDM/Elab/Core.lean b/Strata/DDM/Elab/Core.lean
index 1ee5d3b69..fa42c0360 100644
--- a/Strata/DDM/Elab/Core.lean
+++ b/Strata/DDM/Elab/Core.lean
@@ -1269,8 +1269,11 @@ partial def elabExpr (tctx : TypingContext) (stx : Syntax) : ElabM Tree := do
       match tctx.lookupVar fn with
       | some (.fvar idx k) =>
         pure (ExprF.fvar fnLoc idx, k)
-      | some (.bvar idx tp) =>
-        logError fnLoc s!"Bound functions not yet supported."
+      | some (.bvar idx (.expr tp)) =>
+        -- Support bound function calls
+        pure (ExprF.bvar fnLoc idx, .expr tp)
+      | some (.bvar idx _) =>
+        logError fnLoc s!"Bound variable {fn} is not a function"
         return default
       | none =>
         logError fnLoc s!"Unknown variable {fn}"
diff --git a/Strata/Languages/Core/DDMTransform/Parse.lean b/Strata/Languages/Core/DDMTransform/Parse.lean
index 5b192686d..605445714 100644
--- a/Strata/Languages/Core/DDMTransform/Parse.lean
+++ b/Strata/Languages/Core/DDMTransform/Parse.lean
@@ -294,6 +294,16 @@ op command_fndef (name : Ident,
                   inline? : Option Inline) : Command =>
   inline? "function " name typeArgs b " : " r " {\n" indent(2, c) "\n}\n";
 
+// Function declaration statement
+@[declareFn(name, b, r)]
+op funcDecl_statement (name : Ident,
+                       typeArgs : Option TypeArgs,
+                       @[scope(typeArgs)] b : Bindings,
+                       @[scope(typeArgs)] r : Type,
+                       @[scope(b)] body : r,
+                       inline? : Option Inline) : Statement =>
+  inline? "function " name typeArgs b " : " r " { " body " }";
+
 @[scope(b)]
 op command_var (b : Bind) : Command =>
   @[prec(10)] "var " b ";\n";
@@ -304,6 +314,10 @@ op command_axiom (label : Option Label, e : bool) : Command =>
 op command_distinct (label : Option Label, exprs : CommaSepBy Expr) : Command =>
   "distinct " label "[" exprs "]" ";\n";
 
+// Top-level block command for parsing statements directly
+op command_block (b : Block) : Command =>
+  b ";\n";
+
 // =====================================================================
 // Datatype Syntax Categories
 // =====================================================================
diff --git a/Strata/Languages/Core/DDMTransform/Translate.lean b/Strata/Languages/Core/DDMTransform/Translate.lean
index 6d516b876..39417c598 100644
--- a/Strata/Languages/Core/DDMTransform/Translate.lean
+++ b/Strata/Languages/Core/DDMTransform/Translate.lean
@@ -412,6 +412,21 @@ partial def translateMonoDeclList (bindings : TransBindings) (arg : Arg) :
     let fst ← translateMonoDeclList bindings args[0]!
     let (id, mty) ← translateMonoBindMk bindings args[1]!
     pure (fst ++ ListMap.ofList [(id, mty)])
+  | q`Core.mkBindings =>
+    let args ← checkOpArg arg q`Core.mkBindings 1
+    let .seq _ _ bindingSeq := args[0]!
+      | TransM.error s!"mkBindings expects seq {repr args[0]!}"
+    let bindings ← bindingSeq.mapM (fun bindingArg => do
+      let .op bindingOp := bindingArg
+        | TransM.error s!"Expected binding op {repr bindingArg}"
+      if bindingOp.name == q`Core.mkBinding then
+        let bindingArgs ← checkOpArg bindingArg q`Core.mkBinding 2
+        let id ← translateIdent CoreIdent bindingArgs[0]!
+        let mty ← translateLMonoTy bindings bindingArgs[1]!
+        pure (id, mty)
+      else
+        TransM.error s!"Expected mkBinding, got {bindingOp.name}")
+    pure bindings.toList
   | _ => TransM.error s!"translateMonoDeclList unimplemented for {repr op}"
 
 def translateOptionMonoDeclList (bindings : TransBindings) (arg : Arg) :
@@ -865,14 +880,33 @@ partial def translateExpr (p : Program) (bindings : TransBindings) (arg : Arg) :
     | _ => TransM.error s!"translateExpr unimplemented {repr op} {repr args}"
   -- NOTE: Bound and free variables are numbered differently. Bound variables
   -- ascending order (so closer to deBrujin levels).
-  | .bvar _ i, [] => do
+  | .bvar _ i, argsa => do
     if i < bindings.boundVars.size then
       let expr := bindings.boundVars[bindings.boundVars.size - (i+1)]!
-      match expr with
-      | .bvar m _ => return .bvar m i
-      | _ => return expr
+      match argsa with
+      | [] =>
+        match expr with
+        | .bvar m _ => return .bvar m i
+        | _ => return expr
+      | _ =>
+        let args ← translateExprs p bindings argsa.toArray
+        return .mkApp () expr args.toList
     else
-      TransM.error s!"translateExpr out-of-range bound variable: {i}"
+      -- Bound variable index exceeds boundVars - check if it's a local function
+      let funcIndex := i - bindings.boundVars.size
+      if funcIndex < bindings.freeVars.size then
+        let decl := bindings.freeVars[funcIndex]!
+        match decl with
+        | .func func _md =>
+          let funcOp := .op () func.name (some func.output)
+          match argsa with
+          | [] => return funcOp
+          | _ =>
+            let args ← translateExprs p bindings argsa.toArray
+            return .mkApp () funcOp args.toList
+        | _ => TransM.error s!"translateExpr out-of-range bound variable: {i}"
+      else
+        TransM.error s!"translateExpr out-of-range bound variable: {i}"
   | .fvar _ i, [] =>
     assert! i < bindings.freeVars.size
     let decl := bindings.freeVars[i]!
@@ -1053,6 +1087,57 @@ partial def translateStmt (p : Program) (bindings : TransBindings) (arg : Arg) :
     let l ← translateIdent String la
     let md ← getOpMetaData op
     return ([.goto l md], bindings)
+  | q`Core.funcDecl_statement, #[namea, _typeArgsa, bindingsa, returna, _axiomsa, bodya] =>
+    let name ← translateIdent CoreIdent namea
+    let inputs ← translateMonoDeclList bindings bindingsa
+    let outputMono ← translateLMonoTy bindings returna
+    let output : Expression.Ty := .forAll [] outputMono
+    let inputsConverted : ListMap Expression.Ident Expression.Ty :=
+      inputs.map (fun (id, mty) => (id, .forAll [] mty))
+
+    -- The DDM parser's declareFn annotation adds the function name to scope,
+    -- then @[scope(b)] adds the parameters. So in the body, the scope order is:
+    -- Index 0: parameters (from @[scope(b)])
+    -- Index 1: function name (from declareFn)
+    -- Index 2+: outer scope variables
+    --
+    -- We need to include both the function and parameters in boundVars.
+    -- The function is represented as an op expression that can be called.
+    let funcBinding : LExpr CoreLParams.mono := .op () name (some outputMono)
+    let in_bindings := (inputs.map (fun (v, ty) => (LExpr.fvar () v ty))).toArray
+    -- Order: existing boundVars, then function, then parameters
+    let bodyBindings := { bindings with boundVars := bindings.boundVars ++ #[funcBinding] ++ in_bindings }
+
+    -- Translate body with function parameters in scope
+    let body ← match bodya with
+      | .option _ (.some bodyExpr) => do
+        let expr ← translateExpr p bodyBindings bodyExpr
+        pure (some expr)
+      | .option _ .none => pure none
+      | _ => do
+        let expr ← translateExpr p bodyBindings bodya
+        pure (some expr)
+
+    let decl : PureFunc Expression := {
+      name := name,
+      inputs := inputsConverted,
+      output := output,
+      body := body,
+      axioms := []
+    }
+    let md ← getOpMetaData op
+    -- Create a Function for the freeVars
+    let func := { name := name,
+                  typeArgs := [],
+                  inputs := inputs,
+                  output := outputMono,
+                  body := body,
+                  attr := #[] }
+    let funcDecl := Core.Decl.func func md
+    -- Add the function to the local scope for subsequent statements
+    let newFreeVars := bindings.freeVars.push funcDecl
+    let updatedBindings := { bindings with freeVars := newFreeVars }
+    return ([.funcDecl decl md], updatedBindings)
   | name, args => TransM.error s!"Unexpected statement {name.fullName} with {args.size} arguments."
 
 partial def translateBlock (p : Program) (bindings : TransBindings) (arg : Arg) :
@@ -1204,6 +1289,26 @@ def translateProcedure (p : Program) (bindings : TransBindings) (op : Operation)
 
 ---------------------------------------------------------------------
 
+/-- Translate a top-level block command as a nameless parameterless procedure -/
+def translateBlockCommand (p : Program) (bindings : TransBindings) (op : Operation) :
+  TransM (Core.Decl × TransBindings) := do
+  let _ ← @checkOp (Core.Decl × TransBindings) op q`Core.command_block 1
+  let (body, bindings) ← translateBlock p bindings op.args[0]!
+  let md ← getOpMetaData op
+  return (.proc { header := { name := "",
+                              typeArgs := [],
+                              inputs := [],
+                              outputs := [] },
+                  spec := { modifies := [],
+                            preconditions := [],
+                            postconditions := [] },
+                  body := body
+                }
+                md,
+          bindings)
+
+---------------------------------------------------------------------
+
 def translateConstant (bindings : TransBindings) (op : Operation) :
   TransM (Core.Decl × TransBindings) := do
   let _ ← @checkOp (Core.Decl × TransBindings) op q`Core.command_constdecl 3
@@ -1510,6 +1615,8 @@ partial def translateCoreDecls (p : Program) (bindings : TransBindings) :
             translateFunction .Definition p bindings op
           | q`Core.command_fndecl =>
             translateFunction .Declaration p bindings op
+          | q`Core.command_block =>
+            translateBlockCommand p bindings op
           | _ => TransM.error s!"translateCoreDecls unimplemented for {repr op}"
         pure ([decl], bindings)
     let (decls, bindings) ← go (count + 1) max bindings ops
diff --git a/Strata/Languages/Core/StatementEval.lean b/Strata/Languages/Core/StatementEval.lean
index 1f6f99fb2..5e75bc526 100644
--- a/Strata/Languages/Core/StatementEval.lean
+++ b/Strata/Languages/Core/StatementEval.lean
@@ -295,7 +295,6 @@ def captureFreevars (env : Env) (paramNames : List CoreIdent) (e : Expression.Ex
     | none => body
   ) e
 
-
 abbrev StmtsStack := List Statements
 
 def StmtsStack.push (stk : StmtsStack) (ss : Statements) : StmtsStack :=
diff --git a/StrataTest/DDM/ScopedFunctions.lean b/StrataTest/DDM/ScopedFunctions.lean
new file mode 100644
index 000000000..8df07d3d8
--- /dev/null
+++ b/StrataTest/DDM/ScopedFunctions.lean
@@ -0,0 +1,169 @@
+/-
+  Copyright Strata Contributors
+
+  SPDX-License-Identifier: Apache-2.0 OR MIT
+-/
+
+import Strata.DDM.Integration.Lean
+
+/-!
+# Tests for Scoped Function Declarations in DDM
+
+Tests that function declarations within blocks are properly scoped
+using the `@[declareFn]` annotation combined with `@[scope]`.
+
+This tests the DDM scoping mechanism independently of the Strata Core language.
+-/
+
+#dialect
+dialect TestScopedFn;
+
+type bool;
+type int;
+
+fn trueExpr : bool => "true";
+fn falseExpr : bool => "false";
+fn intLit (n : Num) : int => n;
+fn add (a : int, b : int) : int => @[prec(25), leftassoc] a "+" b;
+
+category Binding;
+@[declare(name, tp)]
+op mkBinding (name : Ident, tp : TypeP) : Binding => @[prec(40)] name ":" tp;
+
+category Bindings;
+@[scope(bindings)]
+op mkBindings (bindings : CommaSepBy Binding) : Bindings => "(" bindings ")";
+
+category VarDecl;
+@[declare(name, tp)]
+op varDecl (name : Ident, tp : Type) : VarDecl => name ":" tp;
+
+category Statement;
+category Block;
+
+op var_statement (v : VarDecl) : Statement => "var " v ";\n";
+
+@[declare(name, tp)]
+op init_statement (name : Ident, tp : Type, e : tp) : Statement =>
+  "var " name " : " tp " := " e ";\n";
+
+op assign_statement (tp : Type, v : Ident, e : tp) : Statement =>
+  v " := " e ";\n";
+
+op assert_statement (e : bool) : Statement => "assert " e ";\n";
+
+@[declareFn(name, b, r)]
+op funcDecl_statement (name : Ident,
+                       b : Bindings,
+                       r : Type,
+                       @[scope(b)] body : r) : Statement =>
+  "function " name b " : " r " { " body " }";
+
+@[scope(stmts)]
+op block (stmts : Seq Statement) : Block => "{\n" indent(2, stmts) "}\n";
+
+op command_block (b : Block) : Command => b;
+
+#end
+
+---------------------------------------------------------------------
+-- Test 1: Function declaration in block, called in subsequent statement
+---------------------------------------------------------------------
+
+def funcInBlockPgm :=
+#strata
+program TestScopedFn;
+{
+  function double(x : int) : int { x + x }
+  var result : int := double(5);
+  assert true;
+}
+#end
+
+/--
+info: program TestScopedFn;
+{
+  function double(x:int) : int { x+x }var result : int := double(5);
+  assert true;
+}
+-/
+#guard_msgs in
+#eval IO.println funcInBlockPgm
+
+---------------------------------------------------------------------
+-- Test 2: Multiple function declarations in sequence
+---------------------------------------------------------------------
+
+def multipleFuncsPgm :=
+#strata
+program TestScopedFn;
+{
+  function inc(x : int) : int { x + 1 }
+  function dec(x : int) : int { x + 0 }
+  var a : int := inc(5);
+  var b : int := dec(a);
+  assert true;
+}
+#end
+
+/--
+info: program TestScopedFn;
+{
+  function inc(x:int) : int { x+1 }function dec(x:int) : int { x+0 }var a : int := inc(5);
+  var b : int := dec(a);
+  assert true;
+}
+-/
+#guard_msgs in
+#eval IO.println multipleFuncsPgm
+
+---------------------------------------------------------------------
+-- Test 3: Function with multiple parameters
+---------------------------------------------------------------------
+
+def multiParamFuncPgm :=
+#strata
+program TestScopedFn;
+{
+  function sum(a : int, b : int) : int { a + b }
+  var result : int := sum(3, 4);
+  assert true;
+}
+#end
+
+/--
+info: program TestScopedFn;
+{
+  function sum(a:int, b:int) : int { a+b }var result : int := sum(3, 4);
+  assert true;
+}
+-/
+#guard_msgs in
+#eval IO.println multiParamFuncPgm
+
+---------------------------------------------------------------------
+-- Test 4: Nested function calls
+---------------------------------------------------------------------
+
+def nestedCallsPgm :=
+#strata
+program TestScopedFn;
+{
+  function double(x : int) : int { x + x }
+  function quadruple(x : int) : int { double(double(x)) }
+  var result : int := quadruple(2);
+  assert true;
+}
+#end
+
+/--
+info: program TestScopedFn;
+{
+  function double(x:int) : int { x+x }function quadruple(x:int) : int { double(double(x)) }var result : int := quadruple(2);
+  assert true;
+}
+-/
+#guard_msgs in
+#eval IO.println nestedCallsPgm
+
+---------------------------------------------------------------------
diff --git a/StrataTest/Languages/Core/Examples/FunctionDeclDDMTest.lean b/StrataTest/Languages/Core/Examples/FunctionDeclDDMTest.lean
new file mode 100644
index 000000000..b407a1d21
--- /dev/null
+++ b/StrataTest/Languages/Core/Examples/FunctionDeclDDMTest.lean
@@ -0,0 +1,56 @@
+/-
+  Copyright Strata Contributors
+
+  SPDX-License-Identifier: Apache-2.0 OR MIT
+-/
+
+import Strata.Languages.Core.Verifier
+
+---------------------------------------------------------------------
+namespace Strata
+
+-- Test that DDM can parse function declaration statements
+-- Note: SMT verification of locally declared functions is not yet supported
+-- (function axioms are not generated for SMT). This test verifies parsing
+-- and type checking work correctly.
+def funcDeclStmtPgm : Program :=
+#strata
+program Core;
+
+procedure testFuncDecl(c: int) returns () {
+  function double(x : int) : int { x + x + c}
+  var y : int := 5;
+  var result : int := double(y);
+  assert result == 12;
+};
+
+#end
+
+-- Verify the program parses and type checks correctly
+#eval IO.println funcDeclStmtPgm
+
+-- SMT verification is not yet supported for locally declared functions
+-- #eval verify "z3" funcDeclStmtPgm
+
+---------------------------------------------------------------------
+
+-- Test parsing a top-level block directly (without wrapping in a procedure)
+-- This demonstrates the ability to parse statements directly.
+def funcDeclBlockPgm : Program :=
+#strata
+program Core;
+
+{
+  var c : int := 2;
+  function double(x : int) : int { x + x + c }
+  var y : int := 5;
+  var result : int := double(y);
+  assert result == 12;
+};
+
+#end
+
+-- Verify the block program parses and type checks correctly
+#eval IO.println funcDeclBlockPgm
+
+---------------------------------------------------------------------