Open a rez file with Dragon Unpacker (say AVP2.rez).
Right click on the folder you want to extract in the folder tree on the left sidebar. So if you want to extract it all, you right click on AVP2 folder in the sidebar and click extract all and enter the destination path.
Personally I use lithrez x AVP2.rez c:/FOLDER PATH/
I use Dragon Unpacker just when I want to extract a few files in a rez and not all of them.