What is DDS?
DDS is DirectDraw Surface, the texture format games ship. Its point is that the GPU reads the compressed blocks directly, so BC1/BC3 textures never need unpacking at runtime. FileSorcery reads it and converts out; writing good block compression is a job for a dedicated compressor.
What is PGM?
PGM is the greyscale member of the Netpbm family: a three-line header, then one brightness value per pixel with no compression. It is what image-processing courses, OCR pipelines and computer-vision tools pass around when they want a format with no decoder in the way.