Files ending in DDS are called Direct Draw Surfaces. It is a graphics format introduced by Microsoft with DirectX 3.0 for storing textures. The format has evolved and expanded with new skills. This allows the data to be compressed and supports an alpha channel (for transparency).
The format was developed mainly for use in computer games and is almost exclusively found there. For example, Dragon Age, Need for Speed, Battlefield 1942, Orbiter or Crysis use this format.
Of course, as DDS textures are mostly used in 3D games, many 3D programs like Blender as well as gamemaking applications such as Gamestudio or FPS Creator can handle DDS textures. Adobe Photoshop and GIMP need this with NVIDIA DDS Plugin.
Most often resolving problems with opening DDS files is very simple. Just install an appropriate program that supports such files. All of the listed programs support DDS files, but may vary in offered function and purpose. Some programs may be capable only of viewing contents of DDS files or offer file conversion options, but may not be capable of editing such files.
It is possible that although a compatible program has been installed on user’s system, it is not used by the system to open it. This may happen because no default application was associated with this type of files. To associate DDS files with given application, select "Open with" from drop-down menu (accessed by right-clicking on the file). Then select from the list the program or application you want to be used to open this type of file. If the XnView applications is not on the list, select "Browse" option in order to manually locate the directory where XnView has been installed.
Sometimes problems with opening DDS files may not lie with the application itself, but can arise due to other causes, such as: