The alpha is sent as a 256 greyscale indexed file. It should be editable in this format. I can think of no reason why it shouldn`yt be.
Converting to greyscale in PS might result in a file without a palette when you save it out again and this is not correct for reimoport into DXTBmp.
When you say "not editable" is it totally non-editable or is it just that it won`t let you apply certain effects. It is normal for some effects only to be available with 24 bit or greyscale images.
If youcan edit in greyscale then PS may have an option to convert back to indexed colour before saving. This should be ok
I have gone over the work that I was doing and this time DXTBMP worked perfectly and Photoshop CS2 co-operated perfectly with it, what was wrong I cannot find out. The Alpha file was being loaded into CS2 OK as a Color Indexed file and I could not edit the tones of the grey images until I changed it to Greyscale. Which of course was not reloading into DXT successfully. But now all are working OK.
I guess one of those things that "just happen"
Once more my apologies and thank you for your assistance.
