Johnny, cutting a tenon can be done with any straight bit. Not knowing the requirements of this particular jig I will give a general answer. The larger the diameter of the bit should mean less passes and a smoother tenon. A dado bit is just a straight cutting bit sized to match a wood thickness. The Woodworkers Journal December 2004 issue has a plan for building a horizontal router table. That is about as good as it gets for cutting tenons. Many companies make good quality bits. You might check out one of the site sponsors, Holbren is moving their facility and all their in stock bits and sets are 40% off till the end of February. Saving money never hurts.
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Mike
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