  Using a vector vortex coronagraph behind the 1.5-m well-corrected subaperture
(WCS) at Palomar, we detected a second object very close to \epsilon Cephei, a
\delta Scuti F0 IV star. The candidate companion, ~50 times fainter than
\epsilon Cephei, if physically associated, is a late-type K or early M star,
and lies at an angular separation of 330 mas, or 1.1 \lambda/D for the WCS,
making it the smallest angle detection ever realized with a coronagraph in
terms of \lambda/D units. The projected separation of the putative companion is
~8.6 AU, most likely on a highly eccentric orbit. The recently detected
near-infrared excess is thus likely not due to hot dust. Moreover, we also show
that the previously reported IRAS 60 \mu m excess was due to source confusion
on the galactic plane.
