Steps to reproduce:

1. Create a new product (Min=100, Price=5.00)
2. Add quantity discounts (Discount Type=Actual Price, 250=4.50, 500=4.00)
3. Create a "10% off" Special for the product and add 100 to the cart.
4. Price in cart is correctly calculated at 10% off
4. Set qty in cart to 250 or 500 and hit update
5. Regular price is displayed in cart, discount is gone

The discount only applies to the base price/min qty and does not affect the price of the quantity being ordered if higher than the minimum quantity. In other words, it completely ignores quantity discounts.

We mentioned this last year for 1.3.7 and hoped it would be fixed in a later release since it is definitely a bug. Unfortunately it has not been corrected and the Specials module is defunct under these circumstances and cannot be used with qty discounts.

The requirement is quite common with wholesale distributors. I cannot fathom why it was not addressed by 1.3.8a