If you upgrade to SQL 7, you can move to 2005.

http://msdn.microsoft.com/en-US/library/ms143393%28v=SQL.90%29.aspx

However, DTS was better in SQL 2000. You ought to be able to restore the database from v6.5 backup to 2000 directly, and that would set your collation. In newer versions of SQL, you don't need the server collation to match, so you can have separate collations for the database.