You can control the size of the Masktype with the Offset option, and the Masktype can be changed to Wipeout, Solid or 3Dface depending on your requirements. Wipeout is probably the most useful, blanking a box of the geometry below from around the Text, as shown above.
TEXTMASK works on both single line text objects (DTEXT) and multi-line text (MTEXT). If you move the Text, the Masktype will follow.
Note: If you have turned your Groups off, then the Masktype will move independently of the Text. A Ctrl+H will turn your Groups back on.
You can edit the Masktype with grips if you turn TFRAMES on. This comes in handy when you want the TEXTMASK to follow a specific shape.
This is an extract from the Lynn Allen's Blog, Manufacturing Community Blog