Yes, that is correct. Teflon tape, also known as PTFE (polytetrafluoroethylene) tape, is commonly used to seal threaded joints in plumbing systems to prevent water leaks. When wrapped around the threads of a pipe fitting, the tape acts as a barrier to prevent water from leaking out of the joint.
The tape's smooth surface also helps to create a tight seal by reducing friction between the threads of the fitting, making it easier to tighten the joint and achieve a secure connection. However, it is important to note that Teflon tape should not be used on threaded connections that carry gases, as it is not designed to withstand the pressure associated with those types of applications.