can a dvd be played on Apple TV

It most likely won't work due to copyright restrictions (HDCP) on the DVD/bluray. You would need to connect a DVD/bluray player to your TV directly rather than using the ATV to play it...

I ripped our DVDs and Blu ray discs to MK4 files then dropped them into iTunes. They show up in home movies. Now any Apple TV can play them. Awesome.

Thats fine, but any further discussion related to ripping commercial media is not permitted here

appletv support these codecs and containers and no others https://www.apple.com/tv/specs/

Video Formats

H.264 video up to 1080p, 60 frames per second, High or Main Profile level 4.2 or lower

H.264 Baseline Profile level 3.0 or lower with AAC-LC audio up to 160 Kbps per channel, 48kHz, stereo audio in .m4v, .mp4, and .mov file formats

MPEG-4 video up to 2.5 Mbps, 640 by 480 pixels, 30 frames per second, Simple Profile with AAC-LC audio up to 160 Kbps, 48kHz, stereo audio in .m4v, .mp4, and .mov file formats

You can't use DVD Player with Airplay.

Some people have reported success playing a DVD with VLC media player.

In all honesty quality will probably be better using a cheap DVD player plugged into the TV.