The windows 10 DVD is a bootable DVD and contains the set up files for windows 10 and windows sytem fils and drivers in compressed format. The setup file decompresses them and install windows to your hard drive.
Your hard drive contains a system partition ( boot files) and a recovery partition containing windows tools. If your system crashes, windows failing to start 3 times in succession should cause the recovery tools to boot menu to allow you to repair or recover your machine.
In the event that this does not work, having a windows DVD or USB allows you to boot from the DVD/ USB and access the same repair menu but from the boot media instead of the hard drive.
Beware windows 10 system restore is switched off by default may be worth going into settings recovery and switch it on.
Some of us are paranoid about our data and will do backups or mage system images to external sources on a regular basis. The fabled Anniversary Update last August caused my machine not to boot all windows recovery systems faile ( restore, recovery from windows back up, reset keeping data, and reset without keeping data) luckily I had taken a system image with Macrium Reflect before applying the update.