Yes, it is valid for a <dd> to contain a <ul>. According to the HTML Spec, <dd> elements should contain flow content. Unordered lists are considered flow content.
However, if each of the items in your example are alternate descriptions for the proceeding <dt> term, they should not be marked up in an unordered list and should instead be marked up using a series of <dd> elements.
For instance, the following is valid HTML, but semantically incorrect—because it implies that the entire list is a singular description for the term.
<dl>
<dt>Firefox</dt>
<dd>
<ul>
<li>A free, open source, cross-platform, graphical web browser developed by the Mozilla Corporation and hundreds of volunteers.</li>
<li>The Red Panda also known as the Lesser Panda, Wah, Bear Cat or Firefox, is a mostly herbivorous mammal, slightly larger than a domestic cat (60 cm long).</li>
</ul>
</dd>
</dl>
The valid and semantically correct way to mark up this content is:
<dl>
<dt>Firefox</dt>
<dd>A free, open source, cross-platform, graphical web browser developed by the Mozilla Corporation and hundreds of volunteers.</dd>
<dd>The Red Panda also known as the Lesser Panda, Wah, Bear Cat or Firefox, is a mostly herbivorous mammal, slightly larger than a domestic cat (60 cm long).</dd>
</dl>