The primary difference between shred and the DoD standard is that shred writes a random character on all passes (except for the last pass if you use -z) instead of just the last pass. Two passes of dd the first writing a one, the second a zero, followed up by shred -n 1 would perform the DoD method. The idea behind the shred method is that since each write is random, it's more difficult to piece together legitimate data after the fact.