not entirely sure what you mean by 'custom NPC animations'? if you're talking about how to make NPCs move around, then yeah, that's through the <ANP command - each entity's animation states correspond to a number, and they're generally unique to that npc - ie. jack walking is 0008, but balrog walking is 0060... there's a list in booster's lab's help folder (incomplete, but lists most of the important npcs), or you can look at the original game scripts
anyway, the <ANP syntax is:
<ANPWWWW:XXXX:YYYY
W = the entity's event number (a four-digit number that you assign to it, such as 0100 and not to be confused with the entity number, which is what # it is on the entity list)
X = the animation number, see above
Y = the direction you want the entity to face, 0000 for left or 0002 for right