The Dart source code is compiled to native code using Dart's AoT compilation feature. It still needs parts of the the Dart VM (some runtime components like garbage collection) to run though, but the code is compiled to native code ahead of time, because iOS doesn't allow dynamic compilation.
Flutter can also call out to Android and use Android features only available in Java (same with iOS). Flutter supports to build custom plugins (in addition to a lot of provided ones) to call out to native platform code.
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