Blender? That's a seperate program? At the moment, I'm using Joram's "solution". It's not that the game is THAT hard.
Yes, it is a program for 3D modelling and animation:
Blender.
Oh, yes, sorry: I should've pointed that out. It's all a bit of a pain to work on DKS stuff, it needs a tool created by the modding community (I think) to unpack the archives, another updated one to repack them, a tool called NifSkope to properly update the meshes, and to extract the images from the nif files if doing retexturing (not sure whose idea it was to store them this way!) and a custom tool to put them back, and I also had to work on Blender's export script to get it working properly. All in all, it was really painful and time-consuming to do, but at least I got my character some nicer shoes and stuff out of it.