So I had 3 vials of blood draawn, some for my lithium and some for thyroid, but then also for the first set of labs to determin where my dosages need to be as I am at 2 months on hrt. But there was no testosterone or estrogen test ordered. Instead it was explained that they check the Prolactin Levels to see if they are where they should be to determin how much to change my dosages. Is this true? Is that what they do?

Only your physician can be certain in your case, but it could be that if you are already on psychotropic medications they can elevate prolactin levels even before adding hormones to the mix.

No they told me this is the standard testing method for everyone, they don't test estrogen levels apparently

Huh, you have me there then as my doc ordered a liver panel, electrolytes, testosterone and estradiol level. I don't think they even ordered prolactin until after starting hrt.

At Callen-Lorde, (the community health center I use) they also check Prolactin before and after the first month of HRT (which is at half-dose) It's simply for safety for all MtF patients. They are making sure that Prolactin levels don't significantly increase as that is an indication of a tumor forming in the pituitary gland than in very rare cases, this and if its not checked, the tumor can put pressure on the brain and cause a stroke of other major issues that could easily cause death. They also don't check the initial estrogen levels because it simply doesn't matter. They check the testosterone and liver levels in the beginning  and only after 3 or more months do they start checking the estrogen levels.

Here's a couple of interesting links

"I am producing Prolactin naturally and was told initially "Men do not produce this hormone", yet in the Harry Benjamin Standards of Care, latest version, it is mentioned on page 11: "A pre-treatment Prolactin level should be obtained and repeated at one, two and three years. If Hyper-prolactemia does not occur during this time, no further measurements are necessary.""
http://www.gendercentre.org.au/resources/polare-archive/archived-articles/drugs-are-dangerous-drugs-can-kill.htm

"Estrogens can induce the development of prolactinomas, which is why prolactin levels should periodically be monitored in transgender women. Milk discharge from the nipples can be a sign of elevated prolactin levels. If a prolactinoma becomes large enough, it can cause visual changes (especially decreased peripheral vision), headaches, mood changes, depression, dizziness, nausea, vomiting, and symptoms of pituitary failure like hypothyroidism."
http://en.wikipedia.org/wiki/Hormone_replacement_therapy_%28male-to-female%29

The only times I read about prolactinomas in transgendered women is when non bio-identical estrogens were prescribed (ethinyl estradiol, equine conjugated estrogen/Premarin) which STRONGLY (unnaturally) affect prolactin, sometimes with cyproterone acetate which is also known to increase its levels significantly. Do your own research, read through the papers, you will see for yourself. Sadly, those effects seen with non bio-identical are assumed to be true for bio-identical estrogen as well which, so far, I have seen or heard no case of a prolactinoma occurring with the use of bio-identical estrogen IF cyproterone acetate is not used. Pregnant and breastfeeding women have VERY high levels of prolactin and it is normal as the breast prepares for lactation and produces milk for the infant. Levels can remain quite high for several years if the woman breastfeeds for that long. Even if my prolactin levels are quite high, my doctors aren't concerned because they realize this is perfectly normal and to be expected with high levels of bio-identical estrogen BUT yes, with the use of other estrogens or cyproterone acetate, this can be a problem.

High levels of prolactin don't necessarily mean one has a pituitary tumor or is developing one.

My 2 cents as always, just sharing some info I've come across. Check with your doctor, discuss with them the issue and see what they have to say.

Shawn Sunshine, the place I go to sees Trans as their primary patient and have 8 PAs and NP's and a few docs. They do not test estrogen. The test prolactin, T and a host of other things.

If I understand correctly, when they run this type of test it is a basis to start with and everything else shows up on their printout as well 

This all makes sense now as I had already had blood drawn and the labs from my endocronologist just a few months before I came here , had the T and E levels. They did also order Thryoid and a few other tests. I guess they know what they are doing.