If you have kotor tool, its a pretty simple thing. You go to kotor tool and find daviks armor under Kotor1 > BIF > Templates > Blueprint, Item > and find daviks armor (I think its g_a_class6007) When you open it up, you will find that you are able to edit many things. If you go to the properties tab, you can change the stats, ECT. To make it upgradable, make a new property that says whatever you want to happen when you upgrade it, choose how powerful, and choose which upgrade will make that effect. i would suggest only choosing armor upgrades, not weapon (possibly a game crash?). Anyway, when you are done, just override the origonal file and plop it into your Override folder (save a backup of the original in case you want it back).
Hope that helps! If it doesn't, there are some tutorials on editing items in the Holowan Labs.