Under this mode, each 4x4 texel block can selectively use an alpha component or none. When alpha-enabled blocks are present, this is not reported in the DDPF_ALPHAPIXELS bit in the pixel format flags causing the reader-writer to report the file as a 3-components file (GL_COMPRESSED_RGB_S3TC_DXT1_EXT). The fix requires looking at each 4x4 texel block to detect the presence of 1-bit alpha encoding. When such a block is found, the internal & pixel formats are reported as GL_COMPRESSED_RGBA_S3TC_DXT1_EXT instead. See http://msdn.microsoft.com/library/default.asp?url=/library/en-us/directx9_c/Opaque_and_1_Bit_Alpha_Textures.asp for more information."