I have a turret model in .dsq form ready
First of all, .dsq is just animation data. You also need to export the turret .dts which contains the model
How can I animate it so the whole turret (basically like the tank turret) is able to rotate 360 horizontally and a certain angle up and down?
You have the wrong idea of what a turret is. Basically its just a player vehicle that sits in a mount slot. If you sit in the jeep and switch to a non driver seat; thats what a turret is.
This also implies that you don't have to animate the 360 horizontal animation; only the vertical.
Here is an example of a fully animated turret. Just replicate the animation and the export information with your own turret model.