Where to install mods?

[Scarakus]

ive reached level 7, in expert mode, the "city mod" button still is red.
i thought maybe i needed to install a mod 1st, for it to be available?
i downloaded the CAT_jackhammer tool, but im not sure where to put it?
i cant seem to find any literature on installing mods, so this is my next step.

can anyone help?