Your right DDS is supported

There are still problems with other models I found.
This model for instance:
model download

..will not import with skin.
When I try to export it from fragMOTION directly to med, I get an corrupted file that cannot be opened.
If I export it to milkshake and export it again for mdl from milkshake, I get a readable file.
The animations however are not exported. Which is weired, since it clearly shows all the frames that should be there, just without actual animations