Well, I'm not sure if this is very idiomatic, but here's how I've done stuff like this in the past:

my $toggle = 0;   # initially false
open FH, 'file' or die "open fails: $!";
while (<FH>)
{
    $toggle = !$toggle if /USE/;
    # Not sure why you'r removing backslashes, but....
    # tr/\\//d would be faster, BTW
    s/\\//g;
    print if $toggle;
}
close FH;
[download]

I just had to add the "or die" to your open....

HTH