There is evidence that olfactory cortex responds to its afferent input with the generation of cell assemblies: collections of principal neurons that fire together over a time scale of tens of ms. If such assemblies form an odor representation, then a fundamental question is how each assembly then induces neuronal activity in downstream structures. We have addressed this question in a detailed model of superficial layers of lateral entorhinal cortex, a recipient of input from olfactory cortex and olfactory bulb. Our results predict that the response of the fan cell subpopulation can be approximated by a relatively simple Boolean process, somewhat along the lines of the McCulloch/Pitts scheme; this is the case because of the sparsity of recurrent excitation amongst fan cells. However, because of recurrent excitatory connections between layer 2 and layer 3 pyramidal cells, synaptic and probably also gap junctional, the response of pyramidal cell subnetworks cannot be so approximated. Because of the highly structured anatomy of entorhinal output projections, our model suggests that downstream targets of entorhinal cortex (dentate gyrus, hippocampal CA3, CA1, piriform cortex, olfactory bulb) receive differentially processed information.