Unable to test...
Well, after I downloaded the version 1.08, I noticed that my dear Valorim was no longer on the DinkFrontEnd. So I couldn't test it, it affected a great delay on my developing. And - please if someone knows (but I'm fairly sure someone DOES) tell me how to move my D-Mod to be tryable. I couldn't find someone with my problem from the millions of topics all about 1.08. So please help me. 
Hmm... did you install 1.08 to a different directory than 1.06/1.07? If so, find the old directory you installed Dink to and copy your D-Mods folder to the 1.08 directory.
On top of what redink1 said, make sure your dmod has a dmod.diz file. It needs that to appear in DFArc2.
If everything IS in the correct folders, just start Dink.exe from a command line with the -game option (f.ex. dink.exe -game mymod (mymod being the mod folder's name) )
WHAT?!? Didn't I already change the directory's directory?!? Oh well, I propably copied the "DFarc file"(that's what I call it, I don't know what its real name is)into the DS directory instead... But thanks anyway...
I had several dink folders. To activate one of them, I just runned dink. exe from that folder, then all the DMODs there become avaible for DinkFrontEnd, even if I run it from another folder. I noticed that DFArc2 isn't like that(it always opens the DMODs from the current folder).
You can also change dinksmallwood.ini in your windows folder. I find that quicker (usually).
