Yes, you're not allowed to redistribute copyrighted material unless you have permission from the original owner for profit or free.Is it against the law to sell a flash drive with a digital file of a DVD on it?
It would only be technically illegal for two reasons: if you obtained that movie illegally and then sold it by your described means, or if you had another copy of that movie that you kept for yourself when the original was obtained by legal means (ex: iTunes movie from the iTunes store).
Also, nobody really cares about the legal issue, just sell the flash drive.
Unless you give them the legit copy (the actual DVD itself), then yes it is illegal.
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