As Diolma said it doesn't matter what frame you save the prop from it saves the frame 1 unmorphed prop. I don't reccommend using the "Use External Geometry" option as it save as a PMD file which can get lost or separated if people don't install things correctly. It does save the dynamic information that you setup the cloth with in the PP2 file which is a good thing. This way the end user get's a Dynamic object that's already setup to work as it worked for you.

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