Ok. Lemme give an example. Say I am visiting a HTTP (unencrypted) site. The VPN encrypts the connection between me and the VPN server. From there on, the connection to the site is normal i.e unencrypted. So whether or not you use a VPN if you enter any sensitive info in the HTTP site, you are in danger. So, as long as your Dns is encrypted you won't be directed to unintended IP address. Now, this applies to other network traffic too. The traffic is only encrypted between the client and vpn server. Rest depends on the type of connection anyways, just like when VPN is not being used. So what the Vpn does is just prevents someone linking my IP address to the website or domains I visit,so protecting my privacy to some extent,from entities like my ISP.