I've tried the code you suggested with some changes but I keep getting a syntax error.
for($i=0; $i<count($array); $i++)
{
//getting the db name
$test_table = basename($array[$i], ".dat");
mysql_query($test_table);
//creating the db table
$query = 'CREATE TABLE $test_table,'.
'field1 INT, '.
'field2 CHAR(20) NOT NULL, '.
'field3 CHAR(50) NOT NULL)';
mysql_query($query);
//I've tried both ways with load data infile and insert into.
$loadsql = "LOAD DATA INFILE '$array[$i]' INTO table '$test_table' FIELDS TERMINATED BY ' ' LINES TERMINATED BY '\n' ";
mysql_query($loadsql);
$content = file_get_contents($val);
list($field1, $field2, $field3) = split(' ', $content);
$sql = "INSERT INTO '$test_table' VALUES field1 = $field1, field2=$field2, field3=$field3)";
mysql_query($sql);