Transparency in Blits to Compressed Textures

DirectDraw provides a special trick for creating compressed textures with alpha from plain RGB surfaces. If a source color key is provided on the source RGB surface, DirectDraw assigns an alpha value of 0 to all pixels of that color in the destination. This technique is especially useful for creating DXT1 textures, since they effectively have only 1 bit of alpha information per pixel.

Note  There are no flags that control this behavior. If you do not want any transparency in your compressed texture, do not set a source color key on the source surface.