I use GIMP If I want to modify a dds.
Its also versetile, and its free.
problem is it needs DXTbitmap to run .dds (you select gimp-winremote as the editor, not gimp itself), or get that pain in the rear GIMP .dds editor add on.(either way, still free).
I mostly use it to make .png files (a.k.a templates)
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