Yes, it performs a DA. The steps are very similar if you are familiar with shrink. I have tested the same movie with both application and recode was much faster.
One difference I have noted: with shrink, you have AEC with 4 different settings (sharp, smooth, etc) In recode, you only have "second pass" which is equivalent, but you cannot select sharp or smooth.
Another one: I created NRG file with Nero, but Nero cannot burn it