To apply Color Knockout to your design, click the DTF Properties icon on left menu, then check Color Knockout.

Color knockout in DTF printing refers to removing (knocking out) specific colors from the design so they don’t print and instead allow the garment color to show through. This is often used to reduce ink usage, improve breathability, or create a cleaner, more integrated look with the shirt. Proper color knockout helps prevent muddy colors and ensures the final print looks sharp and intentional on the chosen fabric.
Click the Select Color square to choose a color to knockout. Use the slider to see all possible color choices.
Or enter in the Hex Code for the color you would like to use.
You can also use the eyedropper tool to select any color on your screen.

Here is a design before color knockout:

And here is that design with the black color knocked out:

If the Background Color is changed to black, we can see what our design would now look like when applied to a black shirt.

You can adjust the Tolerance setting to knockout more or less of the chosen color. Adjusting the slider will allow you to preview the result and choose the Tolerance that looks best to you.