I am trying wavelet watershed method but am struck... help!!!

clc; close all;
a=imread('1.jpg');
b= rgb2gray(a);
c=imresize(b,[300 300]);
    d=double(c);
    d=uint8(d);

e=.001;

subplot(4,4,1);imshow(a), title(' orginal image');
subplot(4,4,2);imshow(b), title(' gray image');
subplot(4,4,3);imshow(c), title('resized image');
subplot(4,4,4);imshow(d), title('doubled image');

% intialise weight of watermark

[p q]=size(d);

%generate the key (x)

x=imread('2.jpg');
y= rgb2gray(x);
z=imresize(double(y), [p q]);
z=uint8(z);

subplot(4,4,5);imshow(x), title(' key image');
subplot(4,4,6);imshow(y), title(' gray key image');
subplot(4,4,7);imshow(z), title('resized key image');

%compute 2D wavelet transform

[ca,ch,cv,cd]=dwt2(d,'db1');

%perform watermarking

l=[ca ch;cv cd];
imresize(double(l));
l=uint8(l);
subplot(4,4,10);imshow(l), title('process of watermarking image');

p=p/2;
q=q/2;

for i=1:p
    for j=1:q
        kca(i,j)=n(i,j); %#ok<*SAGROW>
        kcv(i,j)=n(i+p,j);
        kch(i,j)=n(i,j+q);
        kcd(i,j)=n(i+p,j+q);
    end;
end

%display watermark
wa=idwt2(kca,kcv,kch,kcd,db1);
subplot(4,4,8);imshow(wa), title('watermarked image');

%extraction of key frm image
%compute 2d wavelet transform

[rca,rcv,rch,rcd]=dwt2(wa,db1);

n=[rca,rcv,rch,rcd];
o=n-y;
subplot(4,4,9);imshow(double(o*4)), title('extracted key from watermarked image');

[Walter Roberson]

I do not see anything in that code that has to do with watershed. I do see parts of the code that have to do with watermarks. Should your reference to watershed be reference to watermark ?