I have an 81 DT125 that I just started working on, the most compression I can get it 120psi after 5-6 kicks, throttle open. Is that where it should be?
Are the crank seals replaceable without splitting the cases, I know this bike has sat in a shed for about 15 years. The spark is a little week, I am thinking I need to clean all the electrical connections, and the grounds on the coil. 

Sounds fine to me.

Yes seals can be replaced without splitting cases

Make sure plug is gapped to spec, new out of box it likely won't be. (You have a CDI magneto, spark is not super bright and can be hard to see at all in bright light, normal.)

Thanks Mark, sounds like from your description my spark might be ok. I just finished going trough he carb, and the reeds look like they are closing tight, so getting new seals looks like the next step to getting it running. Then I can move on to restoration.

Get seals from Yamaha... I use the 1977-79 IT175 crank seals... better ignition side seal.

Seals are ordered, sorry this project docent get a lot of attention, maybe once I get running it will move alone faster.
I found some torque specs reprinted from a DT 250B/400B service manual, but it just shows bolt and nut sizes. Would they be the same on my DT 125? I haven't found one that tell the torque on each bolt like clutch basket act.

Read the manuals. Torque specs are all in there. Manuals are in Tech Library.

fwiw 120 psi is what I get on both my '78 DT 125's (5 - 10 kicks) - same motor as yours. Second MarkT's suggestion of IT seals. And ya, the spark is woeful, I have to close garage door and turn off lights to be sure it's there...

If you're not concerned with keeping it stock, and can throw a bit of dough at it (350 ish) I went with a 'vape ignition system', less maintenance and 12v...