Does “using” statement always dispose the object?

Yes, that’s the whole point. It compiles down to:

SomeDisposableType obj = new SomeDisposableType();
try
{
    // use obj
}
finally
{
    if (obj != null) 
        ((IDisposable)obj).Dispose();
}

Be careful about your terminology here; the object itself is not deallocated. The Dispose() method is called and, typically, unmanaged resources are released.