When you use the Expand command, it places all the files in the same folder.

When you type Expand /?, you receive:

Microsoft (R) File Expansion Utility  Version 5.1.2600.0
Copyright (C) Microsoft Corp 1990-1999.  All rights reserved.

Expands one or more compressed files.

EXPAND \[-r\] Source Destination
EXPAND -r Source \[Destination\]
EXPAND -D Source.cab \[-F:Files\]
EXPAND Source.cab -F:Files Destination

  -r            Rename expanded files.
  -D            Display list of files in source.
  Source        Source file specification.  Wildcards may be used.
  -F:Files      Name of files to expand from a .CAB.
  Destination   Destination file | path specification.
                Destination may be a directory.
                If Source is multiple files and -r is not specified,
                Destination must be a directory.
You can use the Cabinet Tool, installed from the Support Tools folder of the CD-ROM.

When you type cabarc /?, you receive:

Microsoft (R) Cabinet Tool - Version 5.1.2600.0
Copyright (c) Microsoft Corporation. All rights reserved..

Usage: CABARC \[options\] command cabfile \[@list\] \[files\] \[dest_dir\]

Commands:
   L   List contents of cabinet (e.g. cabarc l test.cab)
   N   Create new cabinet (e.g. cabarc n test.cab *.c app.mak *.h)
   X   Extract file(s) from cabinet (e.g. cabarc x test.cab foo*.c)

Options:
  -c   Confirm files to be operated on
  -o   When extracting, overwrite without asking for confirmation
  -m   Set compression type \[LZX:  -p   Preserve path names (absolute paths not allowed)
  -P   Strip specified prefix from files when added
  -r   Recurse into subdirectories when adding files (see <b>-p</b> also)
  -s   Reserve space in cabinet for signing (e.g. -s 6144 reserves 6K bytes)
  -i   Set cabinet set ID when creating cabinets (default is 0)
  -d   Set diskette size (default is no limit/single CAB)

Notes
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When creating a cabinet, the plus sign (+) may be used as a filename
to force a folder boundary; e.g. cabarc n test.cab *.c test.h + *.bmp

When extracting files to disk, the <dest_dir>, if provided, must end in
a backslash; e.g. cabarc x test.cab bar*.cpp *.h d:\test
The -P (strip prefix) option can be used to strip out path information
e.g. cabarc -r -p -P myproj\ a test.cab myproj\balloon\*.*
The -P option can be used multiple times to strip out multiple paths

When creating cabinet sets using -d, the cabinet name should contain
a single '*' character where the cabinet number will be inserted.
<dest_dir></dest_dir>