The dialog.tlk file contains all conversation lines by all NPCs, all Force Power and Feat descriptions and names, all item names and descriptions, and various error codes used by the developers. The KotOR 1 .tlk file differs from the TSL .tlk file, thus some mods may not work between games if the .tlk file is modified.
It can only be opened using the TalkEd program, which can also edit string references (StrRefs).