direct play to more clients from my Plex server. I don't usually care about chapters, but, sometimes .MKV has playback issues with chapters.

If you care about Plex Media Server for streaming digital content, here is what Plex recommends for 1080p direct playback:

Direct Play Video Support

Native video support is typically (but not always) limited to the MP4 container, H.264 video encoding, and AAC audio. Content that is not natively supported will automatically be Direct Streamed or transcoded as needed by the Plex Media Server.

See the Specific Model Differences later in the article for more information about cases that may vary from this. Content matching the following can usually be Direct Played:

Container: MP4
Resolution: 1920×1080 or smaller
Video Encoding: H.264 (level 4.0 or lower)
Video Framerate: 30fps
Video Bit Depth: 8
Audio Encoding: AAC

Other content will usually need to be either Direct Streamed or transcoded. Enabling subtitles of any type will require them to be transcoded (burned) into the video stream.

Unsupported audio formats in video will have the audio automatically transcoded to either AAC or AC3 (Dolby Digital) as appropriate by the Plex Media Server in order to preserve any surround sound audio channels.