Adding native support for DDS images and other older video game images types would be very helpful since I have found converting to PNG and then back to DDS can cause issues. I love the software and hope to keep using it to enhance older games and this would greatly improve that process.
While useful for making the flow cleaner (if it preserved type of DDS) it is not going to improve quality of result.
DDS is a image compression format much like JPG that by design loses image quality to save file space and the best quality compressors take a very long time to process; while PNG is a file compression format (like a .zip file) that does not change image quality at all.
So just like any JPG to PNG to JPG conversion you will suffer decompression and recompression quality issues just as well with a DDS to TPAI to DDS flow. Since TPAI file save optimizes for saving time and file size rather than image quality, some have already complained that their saved JPG are significantly smaller and thus less quality.
The size enhancer algorithm has a slider for trying to undo compression artifacts (dither noise and blocky gradients) so is useful for DDS images, but compressing it back to DDS will just reintroduce those artifacts. That can be useful in cases where low quality fast DDS compression was done and you are replacing it with high quality slow DDS compression as well as AI resizing. It is best if modding an old video game if you can find modders resources that have the original uncompressed image formats (usually TGA/BMP). But even with that any alpha layers exist TPAI screws up those quality.
For JPG in particular, Topaz Photo AI saves JPG files at 95% quality by default, which is the highest quality that does not introduce artifacts. It’s the most space and quality efficient way to save JPG. You can increase the quality to 100% by clicking Save > Export Settings > Format > JPEG and increasing the slider to 100.