I think it does, because I use it and I get an “could not resolve address” error if some popup tries to open a browser window with blacklisted websites.
Sometimes I get a “custom blocked error” ipfire website. I don’t know the difference for this behaviour but the result is always the same: blocked. Maybe it’s because I use filter lists and custom blacklists and the ipfire error website just appears for custom blocked websites.
BUT: you may use online services to resolve the ip address of URLs and talk to the servers directly with this ip so your filter may become useless. This is actually a good point to request a upgrade for the URL filter: ipfire should resolve the server ip of any custom black/whitelisted website and block it as well so you can’t communivate with the server even you know its ip address.