Simple as it sounds. I want to play blood with the cd music but not sure if it works. I've tried to run blood with the cd in the tray but no success. Any tips?

Did you try mounting the CD as iso on dosbox manually?

Could just get the GOG version, where it's auto-configured to do it.

Personally, I've never had any luck with DOSBox mounting an ISO file and playing the audio tracks.
The GoG Blood package, uses a cue sheet which tells DOSBox what OGG files it should reference to emulate the CD audio tracks. This works fairly well for me, although the Audiotrack has been known to crap out and only play once, or be disrupted by some other event.
If you are handy with a txt editor, you should be able to use the instructions from the DOSBoxWiki, to create the same effect.
See: DOSBoxWiki: Cuesheet
refer to the section labeled: "Compressed audio tracks"