I have a figure with 4 damage hitting a Thanos on an invuln click. Both figures are on elevated. My figure hits nd rolls doubles. Thanos takes two but still has invuln when knocked off. Would thanos take another two for fall damage?

Not if he has invulnerability when he takes the knockback. He would be dealt two damage from the falling, his power would reduce it by two, and things would be good.

Ok I was confused because I thought ALL damage was dealt in one step. I didn't know knockback was applied after.

Kallisti is right. :D

All damage from the attack is dealt at the same time. KB damage is not damage from the attack.