Ok, made it work, I needed to convert 2.85 to 5 V and then to RS232. Getting the required data from the GPS on my hyperterminal.
BUT
Upon connecting the hyperterminal to PIC I can only see the commands PIC is sending and I am unable to reply to my PIC via hyperterminal. Has it got anything do with RTS & CTS and what do these pins do excatly?

If my PIC sends AT command to my GSM, should it request an CTS first to be safe (As it is working without it now)?

AND

How can I also reply to my PIC via hyperterminal?

Thanks in advance