Iteration and changing processing extents in ModelBuilder

Here is what I am trying to do:

• iterate through features in a feature class
• for each feature create a fishnet (Create Fishnet tool)
• implement downstream processes to work on the fishnet created for each feature

The problem i am running into is that the processing extent used by the Create Fishnet tool seems to take the full extent of the features I am trying to iterate through, and thus creates a fishnet grid for the full extent during each iteration. How can i get model builder or the Create Fishnet tool to accept the extent of the current feature in the iteration?

Thanks in advance!