The transition tool is designed to bring in image sequence files as a transition in Davinci Resolve version 17.4 and up. Unzip the folder and place the #Tools folder in your Transitions folder, this will create a new category inside the effects library. Drag the effect onto a cut in the timeline and open the inspector, select the browse button and navigate to your image sequence file. Selecting the first image of the sequence will import the whole sequence.
A notification box will open and ask if you want to shrink or expand the transition tool to fit, select yes. The image sequence is now inside the transition tool, if you wish to save this to the effects library right click the transition and select create transition pre-set. Once you have named you new transition it will appear in the effects library under a new User category.
Here is a video which explains how to use the transition tool.