Mate listen. First of all hear that LINUX IS NOT WINDOWS. Read that again, 5 times. Now read further.
In Windows you come from the mentality that partitions are arranged by drive letters such as C:, D:, E:, etc. and they can be formatted with either FAT, FAT32, or NTFS. However take note that drive letters is not the only way to access your partitions.
In Linux we mount the partition to a particular path. In layman's term there is a particular folder which is empty and much like a regular folder, however at that path, the partition has been mounted and you can access its files.
For example your C: could be mounted at say /media/disk1, then in the directory /media/disk1 you could access your files in C: It could be any other directory, but let's move further.
Linux for installation requires its the partition in its very own file system such as Ext3, Ext4, ReiserFS, etc. The main linux partition i.e the root partition with path / is the partition in which your Linux system has been installed and it can be formatted with Linux native partitions only but not FAT32 or NTFS.
As for making "dual OS", which is actually called dual-booting, first install Windows then Linux.
Happy Linuxing.
