Mastodon DMs are not end-to-end encrypted. In theory admins could manually see DMs in their server's database. (The same is true on Twitter/X etc.)
If you want encrypted communications, I'd recommend XMPP (aka Jabber). It is federated into servers like Mastodon, but designed for encrypted messaging & calling.
There's a non-technical site to help people sign up on existing servers:
➡️ https://joinjabber.org
To start a server, there's a managed hosting service at:
➡️ https://snikket.org
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