Are Fender Dreadnoughts good for playing folk music?

Or are they more suited to blues-style playing? And what sort of guitars are most associated/best for playing folk music?

I don't much care for them.

I prefer Alvarez's for folk and/or blues.

You can have a listen here:
http://www.myspace.com/macegill

There is Irish folk on the player, and blues on the videos.