how do i extract models from kotor 1 and put them into gmax or 3ds max? I have heard that i may have ftp my whole game onto my pc and tell kotor tool where the game is located is this true? or is their another easier way.

okay ill even take just knowing how to extract the models.

Actually, all you need to transfer are the following files and folders (along with its contents):

dialog.tlk
chitin.key
RIMS\ <--- (This is optional, but you can still transfer it if you want)
BIFS\ <--- (Most of the essential files like 2da.bif are found here)
Modules\ <--- (uti, utc, utp items are found here)

When you open kotor tool, go to options-->manage paths
Once you point out the location of the chitin.key file, just click on the "V" button and it'll populate for you. You would need to exit and restart the program for the changes to go into effect.

Hope this helps.