"Do Not Contact" is a prospect stage. Stages do not affect the way you or other Outreach users communicate with a prospect - Marking a prospect's stage as "Do Not Contact" will not block you from communicating with that prospect, it's a label that helps you manage your prospects. You can learn more about stages here. Here is some more information on stages.
If you wish for stage changes to affect communication, you may want to consider setting up a trigger.
If you want to ensure you don't communicate with somebody ever again, the prospect will need to be opted out, either by unsubscribing from your emails or you can manually opt them out. In order to manually opt somebody out, you can follow these steps.
If you want a particular prospect to be finished in any active sequences, but still want to communicate with them in the future, you'll want to mark them as finished.
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