i have figured it out i had to convert the dds materials file to a jpg and it showed right up so for anyone else having this problem try that and see if it works for you as well
Hello i have taken a .3dc file from a game put it into 3ds max added materials to make it look just right and this is what is looks like
http://img217.imageshack.us/i/pepa1.png/
next i exported it as a .3ds and as a .obj and when i opened them in pepakura i got this...