DMG same size as folder?

What am i doing wrong, that would make the folder of files the same size as the DMG that Im creating. Isnt the point to make it smaller so i can get it on 1 dvd?
thanks in advance!

In order for the .dmg to be smaller, you need to use one of the compressed formats, e.g. zlib or bzip2. Also, certain types of files (audio, video, photos) are already internally compressed so DropDMG cannot shrink them further.