According to R. Stalnaker, context plays a role in determining the proposition expressed by a sentence by providing the domain of possible worlds that propositions distinguish between: a sentence expresses a proposition by selecting a subset of the set of possible situations given by the context. This is also true for embedded sentences, but these sentences express propositions by selecting subsets out of contexts derived from the basic one. In this paper we propose a semantic analysis of sentences of the form “In fiction x, p” based on this picture of context. We argue that the derived contexts for sentences in the scope of “In fiction x” are determined by three factors: what the beliefs of the author are taken to be, the conventions established for the fiction, and a defeasible presumption of reliability of the narrator. We develop a formal implementation based on the notion of a system of spheres centered on a set of worlds.