(noob question) where to put frontline supply drop in order to use the assets?

you place the models, materials, sounds, and particles inside of C:\Program Files (x86)\Steam\SteamApps\common\Team Fortress 2\tf, or your tf folder wherever you have it located. It should automatically merge with the folders already there. The demo is a map file, so you can place it in tf/maps. The library is a .vmf, so you can place that in C:\Program Files (x86)\Steam\SteamApps\common\Team Fortress 2\sourcesdk_content\tf\mapsrc.

It's better to use \tf\custom\frontline\ then to just merge it with everything else.