The modulation of infrared emission from the x-ray source Cyg x-3 is e
xplained as due to free-free emission from gas in the wind given out b
y the binary companion to the xray source, and which is heated by the
shock produced by the orbital motion of the compact object responsible
for the x-rays. The observed infrared flaring occurs when the shock e
ncounters clumps in the wind.