This may be a simple C# question but I need a solution.
I have two forms, form1 and form2, with form1 having a
Use the Deactivate
event handler
If I understand your question, I think you actually want to trap deactivation. Button handler inside your main form:
private void button1_Click(object sender, EventArgs e)
{
Form childForm = new Form();
childForm.Deactivate += delegate
{
childForm.Close();
};
childForm.Show();
}