  For the first time, the lunar occultation technique has been employed on a
very large telescope in the near-IR with the aim of achieving systematically
milliarcsecond resolution on stellar sources.
  We have demonstrated the burst mode of the ISAAC instrument, using a fast
read-out on a small area of the detector to record many tens of seconds of data
at a time on fields of few squared arcsec. We have used the opportunity to
record a large number of LO events during a passage of the Moon close to the
Galactic Center in March 2006. We have developed a data pipeline for the
treatment of LO data, including the automated estimation of the main data
analysis parameters using a wavelet-based method, and the preliminary fitting
and plotting of all light curves.
  We recorded 51 LO events over about four hours. Of these, 30 resulted of
sufficient quality to enable a detailed fitting. We detected two binaries with
subarcsec projected separation and three stars with a marginally resolved
angular diameter of about 2 mas. Two more SiO masers, were found to be resolved
and in one case we could recover the brightness profile of the extended
emission, which is well consistent with an optically thin shell. The remaining
unresolved stars were used to characterize the performance of the method.
  The LO technique at a very large telescope is a powerful and efficient method
to achieve angular resolution, sensitivity, and dynamic range that are among
the best possible today with any technique. The selection of targets is
naturally limited and LOs are fixed-time events, however each observation
requires only a few minutes including overheads. As such, LOs are ideally
suited to fill small gaps of idle time between standard observations.
