Dazzle constructs high-precision difference images to detect and measure transients, such as microlensing events, in crowded stellar fields using the Nancy Grace Roman Space Telescope. It generates difference images by subtracting an oversampled reference image, with iterative masking to address outlier pixels. It also provides an analytic correction for small dither offset errors. Microlensing detection is achieved through a three-dimensional matched-filtering technique, optimized with Gaussian kernels to capture varying event durations, and verified through synthetic tests with high recovery rates. Dazzle performs transient photometry via PSF fitting on difference images, using Nelder–Mead optimization for subpixel accuracy.