Dear Rich,
you can format\recycle a dongle through Sentinel EMS included in LDK or through License Generation API included in the Toolbox API Explorer.

Sentinel EMS GUI ** dongle locally connected
login and navigate to Entitlement - make sure to select the proper batch code
press Recycle
if the dongle is locally connected EMS will show the Key ID
then you can tick the checkbox and format the dongle -- all features and products will be deleted except feature 0

Sentinel EMS GUI *** dongle remotely connected
collect a fresh C2V file of the dongle to format
login in EMS and navigate to Entitlement - Check in C2V
check the C2V and then click FORMAT to generate a format.V2C file
apply this V2C -- all features and products will be deleted except feature 0

License Generation API ** sequence of functions:
sntl_lg_initialize()
sntl_lg_start()

select License Type "Format and Update"
locate proper vendor code file
locate a fresh C2V of the dongle to format
License Template? blank definition
click execute

sntl_lg_apply_template()

leave all blank.. and press execute
Save resultant license as a V2C

apply it

hope this helps, let me know if you need any further.
thanks
Ilaria

I am not clear about the cost when making a key.  This key has the Bounce_Lite product from the tutorial.  I believe it used one of my Standalone License from my Master key.  If I clear the key, will it return the license and increase the license count?

hello Rich,
please have a look at Software Protection and Licensing Guide.pdf, chapter "Understanding the Sentinel LDK Master Key Licenses". Please let me know after if you still have unanswered queries, I'll be glad to clarify further.
Please note that the pools consumption of a master key is never returned; also we add an extra 10% to the number of Standalone Licenses and seats provided, to compensate for situations in which a Standalone\seats Licenses should not have been deducted from your Master key.
thanks
Ilaria