||Using "Clip" to subtract polygons works. One major problem, however: The Clip operation acts on the other layers in the map, not just the editing target layer, punching holes in every poly layer simultaneously. Removing the univolved layers, clipping, then bringing them back in protects them, but what a pain! After wrestling with ArcMap for a couple of hours this morning to create three donut holes, I finally gave up and went into AV 3.2. I was done in less than a minute. Sheesh.