What ability!!!???

I was just trying to create a map to test damage reduction... What ability is used to reduce damage. Ex. Enfos uses those shields to reduce damage. I couldnt find the skill that works for it. I used hardened skill, turned it into an item ability, changed it back when it didnt work, turned it to a hero ability when that didnt work.... What ability works for damage reduction when added to an item???

What i did was had a paladin with 1000 life, 0 armor, a footie with chaos damage(100) and attacked the pally with it, and it did 100 damage. Added the armor ring to him, and the footie did 94 damage. Added the -25 damage (hardened skin item i made) to him, took off the armor ring, he did 100 damage to my pally.... stupid items not working >.<

Does anyone know for sure about this, before i kill myself trying to figure it out?
1.) Do damage reduction items stack?
2.) Do they take effect before armor (damage-x)/-%of armor, or
After? (Damage-%armor)-x?

Damage reduction takes effect before armor. Armor abilties do stack, but damage reduction doesn't