Blitzkrieg 1 Fun and Play

Grot, your dds plugin looks a little different from mine, which is the old Nvidia plugin. But I always use DTX5 ARGB interpolated alpha and/or ARGB 8.8.8.8 32bpp unsigned (thx 2 Big Joe). In the early days, I used DTX3 ARGB explicit alpha which also works, but it will shrink the original skin too much if I remember correct.

Let's for example say you have a skin for MP unit of size 1,025KB. If you want to save it the same size, use ARGB 8.8.8.8 32bpp unsigned. Because I want to keep skin sizes smaller, I save the skin as DTX5 ARGB interpolated alpha so it becomes 257KB. Saving it again as DTX5 will not shrink it further, you would need another setting (something like 8.8) to shrink it further.

Vice versa, say you have a small skin of 129KB, you should be able to enlarge it when saving ARGB 8.8.8.8 although it's not gonna look ok. Enlarging mostly results in blurring pixels. But it's possible...
And I know, also shrinking MP skins give coloring errors.

Best way to learn is to experiment and try some settings to see its result. Save 1test_h.dds so you don't mess up the original. Look at the file sizes it created and open in photoshop to see how it looks.

The one setting A8R8G8B8 in your screenshot, I've never seen it written that way, but I guess it is comparable to ARGB 8.8.8.8, no?

When selecting mip maps, the plugin will generate smaller files as well. I've always unchecked that, because in the end I only need one. This could however be useful like in the case the vanilla units have next to 1_h.dds also 1_l.dds and 1_c.dds.