We now know that alien is the Predator, a super hunter with dreadlocks and a mouth that looks like an octopus' one-night stand with a bear trap. See, it turns out the military was lying to "Dutch" and his team of walking testosterone dispensers. They knew full well that something bad had happened to the first team that attempted to "obtain the intel." Dutch (played by The Arnold) was a counter-terrorist/guerrilla specialist who was once a soldier in the Army. Dutch passed the military's test when, after a fight that threatened to explode most of South America, he killed the Predator.
20th Century Fox
And then he kind of passed out on the helicopter ride. Totally understandable.
In Dutch, they found the perfect template for their indestructible prototype cyborg. And that kind of answers the question ...
What The Hell Happened To Dutch?
The novelizations of Predator films attempt to answer what happened to Dutch by saying that he suffered radiation poisoning and was interviewed while being treated. But that's like answering "How are you doing?" with "Yes, I am doing." It says close to nothing. The Dark Horse comics showed Dutch's brother trying to find clues as to what exactly happened to him. Neither of these matter, though, because Dutch never appeared in any sequel or spin-off movie, but was just simply mentioned in passing. When Dutch gets on that choppa' at the end of the film -- he disappears. For good.