Wow, I've never heard of this. Do all browsers "refer" to the hosts file, or just IE?
Hosts has nothing to do with the browser, but rather IP in general. Before looking to DNS for a name-to-IP mapping the IP stack will look in the hosts file. All this trick is doing is telling IP that the IP address for www.myad.com is 127.0.0.1 so the browser then asks 127.0.0.1 for the file instead of asking the "correct" server. Keep in mind though, this will effect your attempt to access anything on that machine, not just the web, but for ad-blocking that's probably fine. -Walden
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