Texture on a textured terrain

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Yes, you are right. The right command is TextureFilter. (edit)However I tried it and it does not work.
Here is an example of what I mean:
;setup graphics
Graphics3D 800, 600, 0, 2
SetBuffer BackBuffer()

;create 1st texture
texture1 = CreateTexture(512, 512)
Cls
Color 0, 0, 255
For i = 0 To 512 Step 10
	Line i, 0, i, 512
	Line 0, i, 512, i
Next
CopyRect 0, 0, 512, 512, 0, 0, BackBuffer(), TextureBuffer(texture1)

;create 2nd texture
Color 255, 255, 255
texture = CreateTexture(512, 512)
Cls
Oval 236, 236, 40, 40, 0
CopyRect 0, 0, 512, 512, 0, 0, BackBuffer(), TextureBuffer(texture)
ScaleTexture texture, 4, 4
PositionTexture texture, 0.5, 0.5

;create terrain
tw = 512 ;terrainwidth
terrain = CreateTerrain(tw)
EntityTexture terrain, texture1
EntityTexture terrain, texture, 0, 1
TextureBlend texture, 3
ScaleTexture texture, tw, tw


;create camera
camera = CreateCamera()
;CameraProjMode camera, 2
PositionEntity camera, tw/2, 500, tw/2
RotateEntity camera, 90, 0, 0

;main loop
Repeat
	;calculate x/y position circle
	time = time + 1
	x# = Cos(time) / 4
	y# = Sin(time) / 4
	;position circle
	PositionTexture texture, x#, y#
	;render
	RenderWorld()
	Flip
;until ESC is pressed
Until KeyHit(1)

End

!note!edited