I've set up a number of top categories, (AdminPanel > Edit categories)
Then within these top categories I create sub-categories which I want listed alphabetically.
Then I go to the top category and there's the option > Sort Subcat.
This arranges the subcats alphabetically.
I can also then make any other alterations in the category sort displayed, if for instance I want to place certain categories ahead of the alphabetical sort.
> Save Order Changes
The site's an ongoing work in progress, and as I'm continually adding new subcategories as I need them, I can then perform Sort subcats to place the new entries in their right order.
However if I have several subcats outside of the alphabetical order I have to manually change their sort # each time > then Save Order Changes
Hope this helps