VBA Code to loop thorugh DAO recordset with pre-existing query

[JHB]

The situation is that when a user enters something in the cboItemName combo box, the last Category used for that item auto populates in the cboCategoryName combo box. When that happens I expect that the AfterUpdate event or the OnChange event would trigger.

No, the events isn't trigged when you change the values using VBA or by Lookup fields, you need physical touch with the control, it is the way MS-Access works

In the attached screen shots you will see some examples that I hope will help visualize what is (not) happening.

Yes that helped a lot.
I've modify your code a little, (database attached), try if the result is what you want, else post back!