Yes, multi-threading is accomplished through isolates. The application is run as a replica on a number of isolates, configurable by a command line option.
Each isolate has its own database connection, etc., but operate exactly the same. This behavior doesn't require any additional effort by the developer. (edit: The initialization code sets up a reactive channel for requests, each isolate instantiates that channel, and Dart's VM manages delivering an HTTP request to the most appropriate isolate.)
So, it's not quite like Erlang/Elixir where each connection gets its own process, rather the default number of isolates is 3. Isolates have their own heap, so memory isn't shared across them, but there is a message hub that isolates can send values across. This is useful when say you have websockets connected to different isolates and you want to broadcast a message to all of them.
You can spawn additional isolates from a 'web server isolate' to move computation to another thread.