How do I open DXT3 type of image files?

I want to re-texture some lumber files, but when I convert the GX_Lumber01.TgPcDx to GX_Lumber01.DDS, it looks like the attachment below. Why does it look all funky looking?
https://www.railworksamerica.com/forum/
https://www.railworksamerica.com/forum/viewtopic.php?f=17&t=12106