Here are the textures: I combined these to produce a DDS file in DirectX Texture Tool. You could also just as well use a PNG or any other format that supported alpha channels.

I'm including the alpha channel grey scale here as well as the color bitmap.
Hopefully you can see from this what is taking place.

Remember:

Black - completely transparent
Grey - 50 transparent/50 opaque
White - completely opaque

Here is the color bitmap.