When you run a Simulink model from the command-line, it always runs the whole thing. There are some pause/continue controls, but that's not the way to go because you don't really have control over how many time steps run before you pause the model.
I would recommend taking the code in your MATLAB script and placing it into a MATLAB Function block. Then, your model can use that code at every time step as it runs, and can seamlessly accept/return data to/from the rest of the model.
- Sebastian
