“Custom DNS” allows you to override the system level DNS service provided by your ISP with something else, such as Google Public DNS, or Quad 9. If you have parental control disabled at the router level, this is the DNS service the router will use.
If you have parental control enabled, then the DNS service specified in the Profile will take precedence, i.e., the system level DNS will not be used. But there’s one exception: when a site is white listed, the system level DNS is used to resolve the domain name (instead of the profile DNS). Now, if the system level DNS is the same as the domain level, then whitelisting does not work.