Yes, uBlock can and does do more than DNS blocking.

Consider the simplest possible case: I run ojford.com and take money from Acme Inc in exchange for displaying their advert. They send me acme-banner.jpg, and I serve it at /static/current-ad.jpg with an <img id="banner-ad" src="/static/current-ad.jpg"> in my header or whatever.

A DNS block covering the ad would block my whole site. Effective, but useless. (Unless you actually intend to boycott anyone who advertises.)

uBlock however can block the #banner-ad element. (Whether community-curated or by you specifying it yourself.)

More realistically this might be say YouTube or googleusercontent subdomains that serve both ads and 'real' content.