Hi,
m3u files are not audio files, they are audio playlists. If you open the m3u file up in notepad you will see links to audio files contained inside. Those audio files are either stored somewhere on your computer, or they are stored on the Internet somewhere. If they are stored on the Internet, the m3u file will list the file link as starting with "<a href="" rel="">http://".</a>
Please verify whether your mp3 files are store on the Internet or on your computer and let me know.