Should be.  There are 2 ways.  You initialize the context menu in the iframe directly (which means that you need to load the hmenu.js and skin files there and either call DynarchMenu.setupContext or define context menus in the standard way, and generally work as if there was no iframe), or you do it from the parent frame (here only DynarchMenu.setupContext would do), assuming that the frame documents are both in the same domain.

The DynarchMenu.setupContext function is exemplified in examples/context3.html in your DynarchMenu package and can be used to assign a context menu to some element after DynarchMenu.setup was executed.