Catalyzes the epimerization of D-Ala-D-Ala to D-Ala-L-Ala. Has broad substrate specificity and catalyzes the epimerization of a variety of dipeptides containing an N-terminal Ala followed by a hydrophobic or polar residue, such as Val, Ser and Met (in vitro). Binds 1 Mg(2+) ion per subunit. kcat is 43 sec(-1) for epimerization of D-Ala-D-Ala. kcat is 58 sec(-1) for epimerization of D-Ala-L-Ala. kcat is 19 sec(-1) for epimerization of D-Ala-L-Val. kcat is 37 sec(-1) for epimerization of L-Ala-L-Ala. Part of a large, functionally divergent protein family. Protein modeling and substrate docking were used to predict the substrate specificity, prior to biochemical analysis. Belongs to the mandelate racemase/muconate lactonizing enzyme family.