The article develops the notion of covariational reasoning and proposes a framework for describing the mental actions involved in applying covariational reasoning when interpreting and representing dynamic function events. It also reports on an investigation of high-performing second semester calculus students' ability to reason about covarying quantities in dynamic situations. The study revealed that these students were able to construct images of a function's dependent variable changing in tandem with the imagined change of the independent variable, and in some situations, were able to construct images of rate of change for contiguous intervals of a function's domain. However, students appeared to have difficulty forming images of continuously changing rate and were unable to accurately represent and interpret increasing and decreasing rate for dynamic function situations.