Forgive my lack of knowledge, but is DDS a file format? I've been using BMPs and TGAs for images. Here are the files I've been using to test: www.upforums.com/test.zip

I created a wmb cube with the texture "test.bmp". The cube's filename is "object.wmb". In the level "test.wmp", I have two versions of the cube. One with overlay on and one with overlay off. They both have the black in them, though. Behind the cubes is the same texture displayed as a sprite with overlay. The overlay works properly on the sprite.

Do I have to use the DDS file format? Thanks again for your time and assistance.