I don't use a custom DNS. I've never had a need for it, least of all as an ad blocker. I just use a VPN for privacy, but again make sure you trust the VPN because they can track everything if they want to. Any good VPN will have a "no logs" policy so that they can't give your data to others even if they wanted to. I use ExpressVPN, but there are other decent ones out there too.

Regarding ad blocking, it's probably an unpopular opinion, but I think ad blockers are essentially digital theft. It costs money for people to run websites and produce content. "Free" websites aren't actually free; most of them rely on ad revenue to keep the site running and profitable enough to keep making more content. Ad blockers remove some of that revenue. It's like sneaking in the back door to a movie theater without paying for a ticket.

I either pay a subscription fee to get rid of ads, or I just deal with the ads.

Important to note that since all of your internet activity goes through your DNS, the owners of a DNS can track your internet traffic unless you're using a VPN. I'm not familiar with this adguard so I can't speak to how trustworthy they are. Just be careful when using private or custom DNS servers; make sure it's a server you trust. They may be tracking your Internet activity for their own purposes, even if they are blocking others from doing so.