Just for the record, you can do what you are seeking by introducing a third (which will hold all locations) in your join.
You need to inner join items with locations (or the available locations for each item if in your scope) and then left join this to table2 using both item and location as keys. In your select you should either select sum by quantity and group by item and location or select item, location, isnull(quantity,0).
adam_k
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