If it's not a full install of Photoshop in the default directory (OR if it's one of the -cough cough- versions), you need to manually look for your plugins folder and ensure it's installed into that location. If it isn't, manually go into Photoshop's settings and force the plugin folder path.
So in order to do this -
EDIT -> PREFERENCES (bottom-most option in the Preferences menu)
PREFERENCES -> PLUG-INS
Tick the box that asks "Additional Plug-Ins Folder" and then choose the direct path to wherever you've installed the nvidia dds plugins too. Hit ok/save preferences. Exit out of Photoshop and restart. It should register the plugin for you after that and let you open DDS textures without problems.
I had the same problem when I reinstalled all of my software to a different HDD instead of my default. Photoshop kept trying to check my default directory instead of the new installation. Try that.
If all else fails, try making a new batch file with something like this which should bulk convert all of the tex into dds instead of doing it one by one.