DFS is comprised of DFSN (namespaces) and DFSR (replication). The two technologies can be implemented independently. However, the components are complementary when used together on Windows file servers.
DFSN allows creating "fake" namespaces or paths which when browsed, redirect the client to an alternate location as configured by an administrator. This allows creating a namespace which can apparently merge content which maybe spread across different file servers. DFSR allows creating multiple replicas of the content which thereby allow a level of resiliency. In the older versions of DFS (first introduced in Windows 2000 Server), the replication was handled by FRS (File Replication Service).
http://blogs.technet.com/b/josebda/archive/2009/12/30/windows-server-dfs-namespaces-reference.aspx provides good details related to DFSN.
See the DFSR tag for more details on DFSR.