Contrasts in Penalized Package

Hi,

The "penalized" documentation says that "Unordered factors are turned
into as many dummy variables as the factor has levels". This is done
by a function in the package called contr.none. I'm trying to figure
out how exactly is a model matrix created with this contrast option
when the user calls the function with a formula. I typed
"library(penalized) ; penalized" but couldn't point the part of the
code where this is done.

I'll appreciate any help on this.

Lars.