Figured it out. Good timing as well, as I just captured an entire goblin ambush group and a Minotaur.
I will repeat for new folks coming into the thread:
The Dump Trick or "What to do with all these cages full of goblins?"
So you've been smart and set up cage traps at your fort entrance when gasp!
AN AMBUSH! happens. Next thing you know you have half a dozen fine wooden cages full of spitting green evil. What to do with them? You could toss them into the caverns to explore, or drown them, of deep magma fry them, but why not use them to train your military!
"But Jackal!" you cry, "If my military could fight them without getting their guts skewered I wouldn't have bothered with the traps! The goblins have armor and spears and all my dorfs have are jockstraps and halitosis!"
Have no fear! You can strip those goblin jerks of all their equipment and use it for your own benefit! (After thoroughly Febreezing the funk out of their shorts!)
Its easy.
1. If you haven't already, make a separate Animal Stockpile, preferably right next to or in your barracks. This puts all the cages together which makes the steps below easier.
2. Define a single tile Garbage Dump very close to the stockpile from Step 1.
3. Pause the game.
4. Use your Designate tool to Dump all the cages with goblins in them en masse.
5. Use your Designate tool to Hide all the cages with goblins in them en masse.
6. Go to the Stocks screen and scroll down to Weapons, Armor, Legwear, etc - everything a goblin ambusher might carry. You will see the many listings of Weapons, etc. Look to the right, and you will see a set of codes: FDH. F means Forbidden, D means its set to be Dumped, and H means its Hidden. Remember this!
7. Everything in the stockpile from Steps 4 and 5 will be listed as (H)idden and (D)ump. Confirm this by looking for non-dwarf weapons like scimitars and daggers. Make sure those weapons are set for dumping!
8. Using the Stocks Screen, go to the Cages list and un-Dump all Cages selected for dumping.
9. Optional - un-Dump the goblins armor, so that they live a bit longer. Or not, and have them get killed in the nude.
10. Exit the Stocks screen and Un-Hide the Cage Stockpile.
11. Watch your dorfs strip all the armor, weapons, quivers, etc, from your caged goblins and put them in the Garbage Tile from Step 2.
12. Use the Designate tool to (R)eclaim all the equipment in the Garbage Tile, netting you all the goblin armor and weapons!
For a starter fortress without a strong metal industry this trick is super useful. With only a Carpenter and Mechanic you can net some metal armor and weapons pretty fast, and train your military. Most of everything you get is inferior to what you can make later of course, but their weapons can be put into weapon traps, and armor melted or sold once you're making your own. The exception to this is masks, which A) Dorfs can't make and B) Protect the face, which is awesome.
I hope somebody finds this useful!