Why is the quality of my DVD the same as the quality streaming to Apple TV

Hi,
This is my first time submitting a question.  I just cannot figure this one out on my own.  I have a 1080p TV.  I have Apple TV 3 and I am using an Apple HDMI cable.  My Apple TV resolution is set at 1080p HD - 60Hz.  My home videos are shot in 1080p.  I use iMovie to make my videos.  I burn my videos to DVDs for older family members using iDVD.  I do it in Professional Quality.  When I play the videos there is some blurr/distortion around some subjects and objects moving on my TV screen (not all the time).  This is expected because i think my DVD resolution is 720p.  But what I cannot understand is why when I play my movie through Apple TV (my movie is in iTunes), the quality of the blurr is the same.
Thanks for your responses
Mike

So it looks better or does it look the same when viewed on the computer? It may appear more promiently when displayed on a bigger screen as well.
Internet speed would not matter since this is over the local network. Do you have the source material or the raw footage on your computer? If it appears there then you have your answer.

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