The nature of linguistic understanding is a much-debated topic. Among the issues that have been discussed, two questions have recently received a lot of attention: (Q1) ‘Are states of understanding direct (i.e. represent solely what is said) or indirect (i.e. represent what is said as being said/asserted)?’ and (Q2) ‘What kind of mental attitude is linguistic understanding (e.g. knowledge, belief, seeming)?’ This paper argues that, contrary to what is commonly assumed, there is no straightforward answer to either of these questions. (...) This is because linguistic understanding cannot be identified with a single mental attitude towards a particular representation. Instead, we should characterize states of linguistic understanding as involving complex representational structures generated by a dual-stream process. The first stream operates on direct representations of what is said, while the second operates on representations of what is said as being said/asserted by a given source. Both these streams feed a situation model, i.e. a complex representation of a state of affairs described by a given piece of discourse. (shrink)