Blender, Milkshape 3D, Wings3D, and Sketchup are the generally suggested programs.
Blender is free, but generally considered to be difficult to learn. There are
wikibooks, and tutorials that may prove useful in learning to simply use the program.
Milkshape 3D is not free ($35), but is generally considered easy to learn. Both of these programs have the required .DTS exporter plugin.
Wings 3D is free and, in my opinion, simple to use.
I don't know if Sketchup is free, I don't know how simple it is to use, and I personally would never recommend it. These programs do not have a .dts exporter plugin, you have to export the file to something you can import into either Blender or Milkshape.
I personally use a mixture of Blender and Milkshape 3D. I originally started out with Milkshape, later started to use Wings3D, then after figuring out Blender I started using it.