Anything added to the data folder is packaged into the applet when it's exported (that's easy enough to double-check as you can explore a jar file with a compression utility like 7-Zip).  I think most built-in Processing methods will assume the file is inside the data folder; but if you do need to specify the path you can use the dataPath(String) method; which prepends it to the String parameter you pass (usually a file-name) and returns the whole lot as a String...

Mind you it might be worth specifying what type of file you want to work with as there are built-in methods or libraries that might make life easier ;)

It's a MID file.

Java has no functions, hence no 'file' function, and Processing hasn't such function either.
Perhaps you meant the File class? What do you want to do exactly?
Some operations in the applet require to sign the jar file.