Need Some Alpha Layer help prz

[thor797]

Ok so im trying to use this dds file attached. For my back ground, on my knowledge book. I have an alpha layer, but my probelm is when i go in game every thing on the alpha layer thats supossed to be transparent comes out white. Its driving me nuts. if any one could tell me what im doing wrong it would be awsome.

Ok my problem in general :

This is for Photo Shop CS

Q: How do i make the alpha layer work?
A: After making your alpha layer, Flip on over to your Layers tab, then From the top tool bar Select Layers > Flatten Image.

Ok now you have the locked layer its rdy to be saved! Now Toptool bar File> Save As... ; Now the File save screen appears, Select .dds ext, make sure your Save Options > Alpha Channel is Checked. Then hit save.

Now the DDS manager comes up, Select DXT3, you do not need to Generate Mip maps. Then hit save. And your done!