An Azure service that provides private connectivity from a virtual network to Azure platform as a service, customer-owned, or Microsoft partner services.
In short - yep - but there are a few caveats.
You can use your own custom DNS infrastructure, however, you need to configure your custom DNS so that the storage account's original FQDN resolves to the private endpoint's IP address.
On your custom DNS server, you can create a forward lookup zone for privatelink.file.core.windows.net and add an A record mapping the storage account name to the private endpoint IP address. Alternatively, you can use conditional forwarders to direct queries for the relevant Azure private-link namespace to an Azure Private DNS Resolver.
When mounting the share, always use the original FQDN, such as mystorageaccount.file.core.windows.net, rather than the privatelink name. DNS should transparently resolve that original name to the private endpoint IP address. This allows applications and clients to continue using the normal Azure Files endpoint name while the actual network traffic is routed through the private endpoint.
Although you might be able to establish a basic network connection to the private endpoint IP address, mounting Azure Files directly by IP address is not a documented or supported access pattern and can cause important functionality to fail.
For identity-based authentication using AD DS or Azure AD Kerberos, the authentication process depends on name resolution and the server's FQDN. Targeting the service by IP address can effectively prevent Kerberos authentication from working correctly.
IP-based access can also cause SSL/TLS certificate validation problems when using HTTPS-based interfaces such as the FileREST API. The certificate presented by Azure is issued for the Azure Files hostname, such as *.file.core.windows.net, rather than for the private endpoint's IP address. Connecting by IP can therefore result in a certificate name mismatch.
SMB access should likewise use the server's hostname rather than the private endpoint IP address. The supported approach is to preserve the normal Azure Files FQDN and make DNS resolve that name to the private endpoint address.
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hth
Marcin