I don't think Simulink can be used for SDDEs, and if(!) I got this right, the answer is so simple that Simulink wouldn't be the best choice anyway. In fact, I think this question is now more "how to solve SDDEs with Euler's method" than how to use Matlab to do this, but I'll post my code anyway to get some closure.. Also, I haven't verified the code below (I created it by combining bits and pieces of information on how to solve ODEs, SDEs, DDEs.. etc.), so if some SDDE wiz would take a look at it, it would be greatly appreciated.