I need help making a transparent alpha layer

[omegaslover]

I am trying to edit guildlogo.dds that came with eXtreme UI. Everything is fine, I can see my logo, but its on a white background instead of a transparent background. I was told that I need to make the alpha layer transparent, but for the life of my I can not figure out how to do it. I am using Adobe Photoshop 7.0. So if anyone could please give me a step by step procedure on how to make alpha layer transparent, that would be great! Thank you.