Exactly.
A DNS that is not configurable, that you can not add your own entries to it. That simply queries an outside server (usually one on the ISP, dynamically selected when the router sets up the connection with the ISP), and which caches the responses for at least some limited time.
No, not caching any queries is absurd. Home devices could be directed to query directly the outside DNS server instead and save power in the router; it would be as fast and use the same network resources.
They bother to place a DNS daemon in a router that has little resources precisely because they want to reduce the load on the ISP DNS.