Yes, pre-rendering takes a nested composition, renders it, and replaces the nested composition in a composition with the rendered movie.
The value of pre-rendering is that you render an item once rather than forcing After Effects to render and re-render it every time that the item is used.
from the Help document:
“A complex nested composition can take a long time to render, either for previews or for final output. If you have a nested composition that you do not expect to work on further, you can save time during each rendering operation by pre-rendering the nested composition into a movie and replacing the composition with the rendered movie. You can still modify the original nested composition, because it remains in the Project panel. If you make a significant change to the original nested composition, just render it again. Pre-rendering a nested composition is especially beneficial when you will use it multiple times in a project.”
———————————————————————————————————
Todd Kopriva, Adobe Systems Incorporated
putting the ‘T’ back in ‘RTFM’ : After Effects Help on the Web
———————————————————————————————————
If a page of After Effects Help answers your question, please consider rating it. If you have a tip, technique, or link to share—or if there is something that you’d like to see added or improved—please leave a comment.