I want to create a .dst embroidery file using Java. Are there any supporting libraries available? Or is it possible to convert any kind of image file to the .dst embroidery file
The short answer to your question is, no. There are currently no popular libraries for generating .dst embroidery files with Java. My guess is that you will have a lot more luck trying to convert other file types to the .dst formats. The only option there (that I know of) is Corel Draw.
In the end, the best solution I can think of is to use the Tajima Ambaasador website. You have to register, but I believe most of their design/DST services are free.
(After some searching around online I also found this website, which has some more free software and seems like the best place to start if you're looking for information.)