What does this fabrication rule do?
Yes, it means each through hole will get 0.001" copper minimum. 

First the holes are drilled, their size according to the drill schedule/drill file. Then the holes are plated. 
Sometimes holes are not plated, so it's a good idea to make notes in the file on what you are doing (ie a"ll the holes are plated" or "All but X holes are plated" or "The holes on X line of the drill schedule are not plated" to make sure the PCB's are being fabricated correctly. (it's not fun to get PCB's back that don't work.)