More than likely it's not allowed for 3 big reasons:
1) It'd be incredibly difficult to get all the required rights to redistribute said music.
2) It'd count as Script Hosting - there'd be a lack of a valid website and a script that pretty much runs constantly. I'm basing this off of a google search that turned up a few different results, but all of them pretty much stream 24/7 to a shoutcast server - that's what we call a "resource hogger."
3) The app I found also requires direct server SSH install access.
If this doesn't sound like it's the right AutoDJ, link us to the one you're asking about - it might still not be allowed, but it might straighten out any confusion.