MPEG to DivX AVI using Nandub frameserving

I have used Gordian knot to convert VOBs to DivX AVIs so I am roughly familiar with the process.

Now I want to convert a VCD DAT file to DivX AVI but Gordian Knot needs some kind of “project” file. In the case of VOBs this is created by DVD2AVI but I cannot use it for DAT files. Is there a similar program which will do that for DAT files so they can be used as input for Gordian Knot?

I can open the DAT file with Nandub but Nandub will only save as uncompressed AVI which is far too big for my disk to handle. It can also “serve” frames to another application but I don’t know how to do this nor do I understand the process well. I understand the frames are served to the next program one by one and processed so you avoid the intermediate humongous file of uncompressed AVI.

VirtualDubMod will save compressed AVI but cannot open the DAT file. Can I get Nandub to serve the frames to Gordian Knot or to VirtualDubMod?

Basically what I am trying to do is get two DAT files (515 + 486 KB = 1 MB) compressed and joined in a single DivX AVI which will fit in a singleCDR.