I was trying to reduce the size of my img files since mover did a basic cp and expanded them to full size.  qemu-img can do it but you need space for a source and destination.  lib-sparisfy command which is part of libguestfs can shrink the img file in place which is ideal.  Would be nice if this suite was included in unraid like other commands such as qemu-img.

You can use cp like so:

 

cp --sparse=always source.img destination.img

 

The problem with this approach is that you need enough space to hold the source and destination.  If both are on cache drive and you're limited on space, not good.  This is why the libguestfs tools are good because there is an option to sparsify in place without having to make a copy of the file in the process.