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I have heads typed in capital letters, but I want first letters of each word to be capitalized and the rest small.

For example, I have

\faculty{BIG HEAD}

but actually I need the result that would be produced by

\faculty{Big Head}

I have played a lot with \Word, \Words, \Cap, etc, but they don't work. Current \word command turns all letters to small, but this is not acceptable.

\definehead[faculty][chapter] \setuphead [faculty][ incrementnumber=list, page=yes, number=no, align=right, style={\switchtobodyfont[impact]\bfb\word}]

mkii or mkiv?

Sure, mkiv. This is the only engine I use :) Vyatcheslav