Procedure for Integrating Alpha Channel when saving as .dds file

Question

Hello,
I'll try to keep this brief but that may be tough...
One project I use Photoshop CS4 for is painting aircraft used with Microsoft Flight Simulator X (FSX).  Here is some background for folks who aren't familiar with this.
Each aircraft is downloaded as a "Paint Kit".  The kits look much like the "trees" that plastic aircraft model kit pieces come attached to (see picture below). 
I paint and add layers onto the kit until the aircraft resembles the design I chose.  The paint kit includes a background,  base parts usually in white, and an assortment of layers adding physical wear, shading, lines and rivets you see on actual aircraft.
Additionally, the kit includes an RGB Alpha Channel and Specular Maps.  In this application, the Alpha channel provides the reflectivity or gloss on the aircraft paint.  The Specular maps provide a sheen much like the subtle reflections you see from a metal flake paint job when the sun hits it directly.
Once all painting and manipulation is complete, the kit is "cut" into specific sizes.  Once the kit is cut, each section is saved as a DDS file using NVidia tools.  The resulting DDS files are placed into folders within the main FSX program folder.  The FSX program "assembles" the sections and processes the different layers and channels resulting in aircraft that are incredibly detailed and realistic.
My problem is I don't know how to properly integrate and preserve the Alpha channel during the "Flatten Image" and when saving the file as a dds file.  As you can see in the "Layers" section in the picture, the Alpha channel is already made.  I just don't know what to do with it to preserve it and ensure the reflectivity it provides is visible in the final product.
Any help is appreciated - what I need to know isn't what the alpha does, but how to properly integrate it into the final product.  I've searched for this info for the last several days, but I've had no luck in finding specific information on how to do that.  I believe it's one of those procedures that is so simple, everyone knows how to do it.  I guess I'm the only idiot on the planet that doesn't know how... .
The paint kit can be downloaded at http://library.flight1.net/wp-content/plugins/download-monitor/download.php?id=1467  if you need it to answer my question or if you're just curious about it.
Thanks for your time and consideration.
Mark

Answer 1

I know nothing about Nvidia DDS file format or 3D.  From you screen capture you have no Alpha Channel.  You do have a normal layer named Alpha Channel with its visibility turn off. Why are you flatting ? When I use Save As and use the file type pull-down and select DDS format to save I get the Nvidia DDS save Dialog that I do not know how to use or understand the buttons options or pull-down menu items. The file instruction and its background make no does not seem to match up with the parts.
I think you have to read the documentation for the Nvidia DDS plug-in. and the normal map plug-in https://developer.nvidia.com/nvidia-texture-tools-adobe-photoshop