var i;
		for (i=0; i<3; i++)
		{
			Line = file_str_read(myFile,fileString);
		}
		
		var i = 0;
		while (i < 3)
		{
			i += 1;
			Line = file_str_read(myFile,fileString);
			if (i == 3) {file_close(myFile);}
			wait(1);
		}

STRING* WordText = "WWW";
STRING* fileString;

TEXT* Word =
{
  layer = 15;
  pos_x = 100;
  pos_y = 100;
  size_y = 40;
  string (WordText);
  flags = SHADOW | OUTLINE | TRANSLUCENT | VISIBLE;
  alpha = 100;
} 

myFile = file_open_write("dialog.txt");

var i = 0;
while (i < 3)
{
	i += 1;
	WordText = file_str_read(myFile,fileString);
	if (i == 3) {file_close(myFile); break;}
	wait(1);
}
Word.string[1] = WordText; //This returns an error: string is not a member of text.
str_cpy((Word.pstring)[1], WordText); //This one doesn't seem to do anything.

STRING* WordText = "#999"; //String with place for 999chars

#include <acknex.h>

STRING* WordText = "#4000"; //string with space for 4000chars (4000chars is the max length of file_str_read())
STRING* fileString = "test.txt"; //the file
var lineToRead = 3; //the line that should be read

TEXT* Word =
{
  layer = 15;
  pos_x = 100;
  pos_y = 100;
  font = "Verdana#15"; //here you forgot a font
  strings = 1;
  flags = SHADOW | OUTLINE | TRANSLUCENT | SHOW;
  alpha = 100;
} 

void main() {
	
	video_mode = 8;
	video_screen = 2;
	
	var myFile = file_open_read(fileString); //you have to use file_open_READ to read the file
	if(myFile == 0) error("Couldn't open the file!");
	
	var i;
	for(i=0;i<lineToRead;i++) {
		file_str_read(myFile,WordText);
	}
	
	file_close(myFile);
	str_cpy((Word.pstring)[0], WordText);
}

myFile = file_open_append(fileString);
	
var i;
for (i=0; i<lineToRead; i++)
{
	file_str_read(myFile,WordText);
	str_cpy((Word.pstring)[0], WordText);
	file_str_write(myFile,str_cpy(WordText,""));
}
file_close(myFile);

while (i < 100)
{
	i += 1;
	file_str_read(myFile,WordText);
	str_cat(newString,WordText);
	str_cpy((testing.pstring)[0], newString); //for displaying results
	if (i >= 100) {file_close(myFile); break;}
	wait(1);
}