[brewdad]

My understanding is that it accomplishes the same thing but for every device on your network rather than having to manage host files on each device. It also works for those where editing the host file isn't possible.

[Juan_Largearm]

It's also good for systems with hard coded domains that ignore hosts files.

Windows will still connect to quite a few even if they are in the hosts file.

[thaumasiotes]

A DNS server can't help with that. You'd need a firewall.