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This effectively masks the first object with the second. The main difference between this function in Corel and masking in Flexi is that in Corel you have no say in locating the mask over the object. It gets centered for you.
I just wanted to add that there is a way to turn off the Auto center feature for power clips in Corel. Under Tools>options>Workspace>Edit... there is a check box to turn this feature on or off. It has been there since version 5 or 6 I think.