Unfortunately, NextDNS primarily operates at the domain level, which means it’s effective for blocking specific domains associated with ads, but it may not directly block YouTube ads. Since YouTube serves ads from the same domain as its content, blocking them becomes tricky with domain-level blockers like NextDNS.
A simple approach would be using a web browser with an ad blocker extension to watch YouTube instead of using the YouTube app.
If privacy isn’t your top priority and your thread model allows, another worthwhile choice to explore is YouTube Premium. Despite requiring a subscription fee, YouTube Premium guarantees an ad-free viewing experience on all your devices, including iPadOS.