G'day WAMUGGER's

Does anyone know how to import a standard DVD (containing VIDEO_TS files, etc) into iMovie.
It tells me the files are not recognised when I try importing.
I have also used Disk Utility to make a DMG file (which I usally do to make extra DVD copies), but DMG files are greyed out when trying to import into iMovie. Consequenty I cannot select them to import.

I have a family movie DVD that is not very well put together (not one of mine) and I would like to get it into iMovie so I can do some editing.

Regards,
Stephen Chape