Free indirect discourse (FID) is a style of reporting speech and thought that combines third-personal narration with direct, first-personal discourse. Expressive terms, such as “idiot” or “asshole”, are known to occur in FID. When so used, the pejorative content reflects the protagonist’s rather than the narrator’s point of view. This chapter broadens the discussion of derogatory terms in FID by investigating occurrences of slurring terms, such as the N-word. The two main approaches to FID, namely the two-context approach and the mixed-quotation approach, are discussed in light of these novel findings. The chapter shows that both are able to account for the data; however, the choice between them imposes constraints on the underlying theory of derogatory terms.