diff --git a/core/dbt/clients/jinja.py b/core/dbt/clients/jinja.py
index 156017a38cb..de2c3e00494 100644
--- a/core/dbt/clients/jinja.py
+++ b/core/dbt/clients/jinja.py
@@ -219,7 +219,7 @@ def __getattr__(self, name):
             return self
 
         def __call__(self, *args, **kwargs):
-            return True
+            return self
 
     return ParserMacroCapture
 
diff --git a/test/integration/006_simple_dependency_test/sad_iteration_models/iterate.sql b/test/integration/006_simple_dependency_test/sad_iteration_models/iterate.sql
new file mode 100644
index 00000000000..5086cff09bb
--- /dev/null
+++ b/test/integration/006_simple_dependency_test/sad_iteration_models/iterate.sql
@@ -0,0 +1,2 @@
+{% for x in no_such_dependency.no_such_method() %}
+{% endfor %}
diff --git a/test/integration/006_simple_dependency_test/test_local_dependency.py b/test/integration/006_simple_dependency_test/test_local_dependency.py
index abc22e5e2c4..b7a231aa3e1 100644
--- a/test/integration/006_simple_dependency_test/test_local_dependency.py
+++ b/test/integration/006_simple_dependency_test/test_local_dependency.py
@@ -5,6 +5,7 @@
 import dbt.config
 import dbt.exceptions
 
+
 class TestSimpleDependency(DBTIntegrationTest):
 
     @property
@@ -45,6 +46,25 @@ def test_postgres_local_dependency(self):
         )
 
 
+class TestMissingDependency(DBTIntegrationTest):
+    @property
+    def schema(self):
+        return "local_dependency_006"
+
+    @property
+    def models(self):
+        return "test/integration/006_simple_dependency_test/sad_iteration_models"
+
+    @use_profile('postgres')
+    def test_postgres_missing_dependency(self):
+        # dbt should raise a dbt exception, not raise a parse-time TypeError.
+        with self.assertRaises(dbt.exceptions.Exception) as exc:
+            self.run_dbt(['compile'])
+        message = str(exc.exception)
+        self.assertIn('no_such_dependency', message)
+        self.assertIn('is undefined', message)
+
+
 class TestSimpleDependencyWithSchema(TestSimpleDependency):
     @property
     def project_config(self):