In the Real World
It is highly unlikely that you will ever need to convert a DTD into a Schema step by step. But as an exercise, this is a good technique for illustrating the similarities and differences between Document Type Definitions and XML Schema.
However, because there will continue to be widespread support for DTDs, conversion is usually not necessary. When conversion is necessary, the odds are also quite high that you will be able to employ an automated tool, such as is available from TIBCO Extensibility at
Although the tools currently supporting XML Schema are not perfect (many are still based on the Working Draft), as these tools are updated to reflect the changes in the Recommendation they will be the best route for updating your DTDs to XML Schema. After you have the base DTD converted into an XML Schema automatically, with a proper knowledge of Schema syntax you can easily go into the converted Schema and fix any existing errors by hand.