can anybody guide me how to decompose three phase currents into direct and quadrature components in simulink matlab?

Hi Ahmad,
you can simply use two "Fcn" blocks (one for each output). You find "Fcn" under "User-defined Functions" in the Library Browser.

Usually we use two separate steps (a-b-c to alpha-beta and alpha-beta to d-q), since this looks simpler.

Hi Ahmad, do you have a good estimate of theta (the angle of the d-q reference frame)?

Well, that is exactly where I am stuck at. Once the angle is found I can hopefully work out the rest using the transformations. So could you please tell me how to calculate theta?

Well, I don't see the problem, once you are in simulation...

The d-q plane was thought for motor control. If you are considering that case, you should run a model of the motor, then you would know the rotor angle.

If you are simply considering a generic three-phase system, with imposed voltages, it can make sense to lock the reference frame to the angle of the first phase sine (e.g. when you are synchronizing to a grid).
In this case, I'd reverse the problem: to generate sinusoidal variables, generate a theta angle by integrating an arbitrary angular speed ( = 2*pi*f, which can be varying), and then calculate sin,cos or sin, sin(+2*pi/3), sin(4*pi/3) signals. In this case theta is the first variable calculated.

But maybe I'm missing the point...

Hi do you have sensors/sensorless/encoders for the angle ? what calculations are you using to get the angular position?

There is park and clark transformations,
One is used to convert 3 phase current to stationary DQ frame,
Other is used to convert to rotating dq frame,
Stationary frame is with respect to stator axes
Rotating frame is with respec to rotating rotor axes
So first you need to decide which is proper for you

I think that Sandro's answer was right to the point.
I think that the question Ahmed is asking is "how to i compute the speed/position of the rotor, so I can input that to my ref frame rotational matrix?"
If this is indeed the question, the answer is is simply use newton's law of rotation (you need to know the friction and inertia coeffs and your load torque so to compute position and speed).
Hope this help.