Note: You cannot use mods that require UE4SS (Unreal Engine 4 Scripting System)
If you want to install mods that are Pak based, you can do this on your dedicated server. Each player will also need to install the mods on their own computers for the mod content to be visible for each player. Pak based mods typically are mods that replace textures and models.
You can download mods for Palworld from CurseForge. Make sure the mod description says the mod is a Pak file, or it won't work on a server.
1. Download a mod from CurseForge, such as this one
2. When downloaded, extract the .zip file to reveal a .pak file
3. Open the File Manager

4. Navigate to /Pal/Content/Paks/
5. Upload the .pak file to this folder.

6. Restart the server

1. In Steam, right click Palworld and click Manage → Browse Local Files

2. In the new window, navigate to \Pal\Content\Paks\
3. Put your .pak files into this directory

Once you have completed these steps, as well as the other players connecting to the server, the modded contend will appear in game.