Use the free app MPEG Streamclip to convert the DVD content to Apple Intermediate Codec (iMovie's preferred editing format).
See this User Tip by AppleMan1958 -
After conversion, import the files to iMovie. Here's some information from iMovie Help that will get you started with using iMovie -
From Help > iMovie Help (an iMovie menu item) -
Import video -
Start a new project -
Add video to your project -
Share (export) your movie -