If I recall, DVD playback was never implemented - you have to rip the disk first. Is this still true? I can't seem to get playback from a usb drive using MC31, but I can play CDs in MC.
It would be a great feature to have, however. Most of my dvd players have died over the years, but I can easily set up an external drive on my JRiver machine. I tested DVDs on VLC and they playback, so it could be in the 'realm of possibility'.