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Another (less stable)method is to mask off the portions you want transparent; however for this to work and for you to control it(motion, extra transparancy,....) you need to embed your image in movie clip by pushing F8 and naming it and choose a type. To mask you create a layer above and right click pc (ctrl click mac) and choose mask. A mask makes areas transparent on the bottom layer that you have filled in the mask layer. (example if I draw a box in my bottom layer and I want a whole in it. I could make a circle in my mask layer over the box and this would create a whole)