YTD is the format used in GTA V for texture dictionary which contains textures in .DDS format.

Objects that uses external textures got definied in ytyp:
<textureDictionary>ytd name here</textureDictionary>

Textures inside ytd should be in formats:

Textures without alpha channel (no transparent) DXT1
Textures with alpha channel (transparent) DXT5
env textures ATI2

Also all textures should be power of 2 with mipmaps for example:
512x512, 1024x1024, 2048x2048, 512x1024, 1024x2048
Heres list power of 2 as reference.