From Valve Developer Community
More Info on DUDV Materials
A Third party program designed to move TGA's into a DuDv format, without the need of having Steam to be running.
- Place the Application in the same folder as your materials. (Optional)
- Open the TGAtoDUDV.exe and it will ask you to choose a TGA file to convert.
- Double click the file you want to convert (Sorry no batch support as of yet)
- A message should appear saying "Sucess! Your new DUDV map was saved to ..."
- The new DUDV texture will have the appended _dudv to the end of the filename.
For best results, Convert a pre-ready Normal Map with this program
- Normal2dudv - utility to convert normal maps to dudv maps (Requires steam running)
- Height2Normal - utility to convert height maps to normal maps