Thanks! I was looking for "effects." I overlooked the blend modes example.
What I mean by image masking is the "Destination out" blend mode example. Now that I know what C2 is calling it, I'm having a hard time recreating it. It works in the C2 example when I open it, but not when I try to recreate it in a different project. I think all you have to do is change the blend mode in the top overlapping sprite to destination out, but it doesn't have the same effect as in the example. The top overlapping sprite turns dark and opaque. I think all the settings are the same, WebGL enabled, but maybe there is something I'm missing? Can you take a look and see if it works for you?
Destination out trouble