Is this supported? If not, is it possible to support?
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Its supported.
http://www.mediafire.com/?2vginlq5jtd Example of loop in a loop
Sweet! And one quick question... Does sub events remember picked objects from the original event?
Why yes they do.
http://www.mediafire.com/?jrltwonrtyv And here is proof that they does.
Subevents are always working with the objects picked by the parent event - it's an important part of how they work. You can also use the Function object to call events and remember objects across them too!