Yes they do use DRM. I know they are using Widevine on the web player, but possibly other ones too (never looked very far). Not sure for the app, it might be that it is using OGG streams with a custom DRM (which is probably the one some existing downloaders actually (ab)use).
Let me start over. Youtube itself has DRM required for certain videos, and certain formats of videos.
The 256 kbps format for music will be protected by DRM. If you do not have DRM available youtube will fallback to a lower quality format to play the auduo.
Music might have higher quality audio-only files as provided where Youtube might have it combined with video and a generic compression algorithm applied as with all other uploaded videos.
Do they have DRM at all? Youtube and Pandora don't.