texture with stencils (sorry if this is a repost)

I use to know my way around loading an image to use as a stencil for painting, but now that I have version 2.74 I just can’t figure it out.

I asked my old professor via e-mail. I went on reddit. I searched Youtube and Google. Nobody seems to have the answer for 2.74.

I need an in depth answer. ex: how my user preferences should be, which add-ons i need to activate n such, the brush settings. There is something I’m just not seeing or I must have accidentally clicked some settings that didn’t need clicking.