The fifth manuscript in Bonhoeffer's Ethics (at least according to the arrangement in the Works) is entitled Ultimate and Penultimate Things. I found the argument difficult to follow in detail, although I think the broad brush strokes are clear and valuable.
The ultimate thing in a human life is justification by grace through faith. The event of justification is "qualitatively ultimate" - "there is nothing greater than a life that is justified before God" (149); it is also "temporally ultimate" - there is "quite literally a span of time at whose end it stands" (150). Whatever leads up to it (whether the righteous confidence of Paul or the legal fear of Luther ) finds its end in this ultimate word, and is therefore penultimate. This is not to say that the penultimate - whatever it is - leads naturally into the ultimate; the latter is always God's gracious word which judges and justifies freely. The penultimate is not penultimate in itself, nor can one judge it to be penultimate when looking forward from it; rather it is penultimate in reference to the ultimate, and can be seen to be such when looking back from the ultimate. The penultimate, then, is (if I understand it correctly) literally everything else that is not the justifying grace of God received through faith.
The relation between the ultimate and the penultimate is the subject of this manuscript. "Since God's justification by grace and by faith alone remains in every respect the ultimate word, now we must also speak of penultimate things not as if they had some value of their own, but so as to make clear their relation to the ultimate" (151). In other words, in sorting through what the ultimate (the gospel) has to do with everyday life (ethics), we must begin with the gospel and show how anything else relates to that. Two main ways have been trodden: the radical way and the way of compromise. "The radical solution sees only the ultimate, and in it sees only a complete break with the penultimate" (153). Christ and the world are at enmity; the Christian has responsibility only for faith. "The world must burn in any case" (153). I've met a few contemporary evangelicals who take the radical way! On the other hand, the way of compromise establishes a semi-independent sphere of everyday life in which "the penultimate maintains its inherent rights, but is not threatened or endangered by the ultimate" (154). Here the ultimate supports the penultimate, in the sense of providing justification for it, but does not in fact speak into the penultimate. Daily life goes on, just with the added reassurance of the gospel.
Bonhoeffer will not travel either path. "To advocates of the radical solution, it must be said that Christ is not radical in their sense; to followers of the compromise solution it must likewise be said that Christ does not make compromises" (154). Therefore, neither of these ways is open to Christian life. Christian life must take its lead from Christ. In his incarnation, his cross, and his resurrection, Jesus has brought judgement on the world, but has also brought the world into genuine encounter with God and has established its genuine future. Therefore "Christian life neither sanctions nor destroys the penultimate" (159), but participates with Christ in the genuine encounter of God with the world.
Because of his understanding of the relationship between the penultimate and ultimate, Bonhoeffer is clear that "the penultimate must be preserved for the sake of the ultimate" (160). He means this quite literally - he gives the example of slaves, who have no control over their own time, and are therefore unable to attend church and hear the word of God! In the area of the penultimate, the church and the Christian must be concerned to prepare the way for the word (citing Luke 3, which itself cites Isaiah 40). Preparing the way of the Lord means making the penultimate, as far as possible, suitable to the ultimate - not that we can make Christ come, or prevent him from coming ("Christ comes, to be sure, clearing his own way, whether one is ready for it or not" ), but that we can make it more or less difficult for ourselves and others to hear the word and believe. As concrete examples, "it is hard for those thrust into extreme disgrace, desolation, poverty, and helplessness to believe in God's justice and goodness" (162), therefore it is the duty of the Christian to relieve those conditions.
"What happens here is something penultimate. To give the hungry bread is not yet to proclaim to them the grace of God... But for the one who does something penultimate for the sake of the ultimate, the penultimate thing is related to the ultimate" (163). The two are joined together in so far as the link is seen, and therefore the way is truly prepared for the coming of Christ. "Only Christ brings us the ultimate, the justification of our lives before God; still, or rather therefore, we are not deprived of, or spared from, living in the penultimate" (167). Knowing the ultimate, the penultimate takes on its own (limited, but real) seriousness.