What are "dds" files?

Hello I am relatively new to modding and trying to learn and I would like to know what "dll" files are, what they do, and how you make them. I've seen them in a mod or two, but if I try to open them Windows says that they're a system file, and when I try editing with Notepad++ I get a huge blurb of binary.

Also on a random off topic side note I made a "World War" button in FireTuner that makes everyone declare war on each other. Not that amazing, but I barely know Lua, so...
(I'm trying to learn though)

EDIT: I meant to ask what "dll" files were.

.DDS is the extension the game uses for its images.

You can view dds files with tools like IrfanView.
To edit them you'll need Gimp or Photoshop.

Oops. I just realized that I meant "dll" files. Sorry.

DLL - Dynamic Link Library

They are compiled code in machine readable format. No meaningful way to open them. To see what's in them you'd need to find the source code (C++ in the case of Civ) that they were compiled from