A little more information could have been used to make this response more accurate, but from what information shared ...
htdocs is your web server document root. Moodle code is probably located there. Inside htdocs one should find a config.php file. You can 'discover' the location of the data directory by inspecting that file - as well as the DB user, the DB, and the DB password to use with mysqldump.
As far as upgrading, **first make a complete site backup** ... tar ball of code directory, tar ball of data directory, and an sql dump of the DB. It is usually recommended to beginning admins to work though the upgrade in a test environment .... same OS, same PHP, same mysql, same web server software, etc.. Much can be learned and it's much safer ... ie, won't trash production server/environment.
Depending upon OS/remotely hosted dedicated or shared/ command line access? ... think upgrading via git the route to go. The directions at http://docs.moodle.org/26/en/Git_for_Administrators would have to be adjusted if doing this on the production server.
One could (on Linux with command line access and git installed), acquire the 2.6.x code via git into an htdocsgit directory. Copy the config.php file from htdocs to htdocsgit. Copy any directory in htdocs/mod/, htdocs/blocks/, htdocs/themes/ that are NOT in htdocsgit (those are add-ons). Note the ownerships/permissions on htdocs and make htdocsgit directory and all files/folders contained therein the same.
Then:
mv htdocs htdocs-old (this keeps the old code directory in case one has to 'roll back')
mv htdocsgit htdocs
cd htdocs/admin/cli/
php upgrade.php
The upgrade process *will* make changes to the DB - that's why you made an sql dump of what you had at 2.5.x.
If all goes well and the upgrade.php script finishes one should be able to access the site with browser, login, and check version by going to Site Admin menu, Notifications. If the upgrade complains about things missing, might have to inspect directories of htdocs-old and move some more to htdocs/same location. You could have other non-core add-ons that weren't a mod/block/ or theme.
Spot check things ...
At this point, I'd recommend making another full site backup ... new code directory, even if the data directory did not change, the data directory, and especially, an sql dump of the DB.
Others might have a different method, but the one above has worked for me.
'spirit of sharing', Ken