Raster image format used by Microsoft DirectX to store textures and environments; can store compressed and uncompressed pixel formats; may be used for storing Windows desktop backgrounds or wallpapers.
Program(s) that open dds files
Windows: Microsoft DirectX Texture Editor; Nvidia DDS Utilities; Otaku DeskSpace; SlowView; IrfanView; Adobe Photoshop with the Nvidia DDS plugin; The GIMP with the DDS plugin
Information from FileInfo.com - The File Extensions Resource.
http://www.fileinfo.com/extension/dds