# How is does a scheme lambda function relate to lambda calculus?

For example:

(define fact
(lambda (n)
(if (< n 2) 1 (* n (fact (- n 1)))))


How is this an example of applied lambda calculus? I tried to read the Steele paper (or for that matter, the Peyton-Jones paper), but got confused when they made the jump from the description of lambda calculus to the application thereof in Scheme.

(lambda (x) (x x))