Yes you are correct. Apparently I did not make that clear. Please put all the files in a single subfolder. Again I use GS. However I did do as you say and had put everything in one folder called GS. If you look in my previous post you should see:
Directory of C:\Download\Game\DeadIsland\GS
11/01/2011 09:12 AM <DIR> .
11/01/2011 09:12 AM <DIR> ..
10/30/2011 04:51 PM 64,512 DumpDI.exe
10/30/2011 11:51 AM 5,045 save_0~
Here I highlighted the important things and omitted the other files. But yes I have both DumpDI and unencrypted GS in the same folder. Thanks again for clarifying an important principle.