It does not protect against traps (except weapon traps) or Killing Blows. Dodge cannot be used if a character is completely immobilized, such as when under the effect of a Web or even simply being tied up.
Example: Ena is facing down a terrifying Dragon Mage. Her enemy gives an evil grin and invokes the power of his patron dragon, throwing a packet for "Spell Shatter Spirit!” - an attack that would force her to Resurrect instantly! Fortunately, she knows the Dodge ability and - even though the packet hits her - can call “Dodge!” to avoid her fate!