AlphaBlend not working?

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Drekinn

Setting the blend mode to AlphaBlend is not producing the desired results: In my program have employed a variety of png images with semi-transparent drop shadows, though the inclusion of SetBlend ALPHABLEND treats the images as if MaskBlend mode is enabled (ie. the semi-transparent pixels are opaque, the images displaying with sharp jagged edges).

What's up with that?