According to Adobe it can using the iFlow reader App (free). I have installed it and no luck yet. I've got a iMac (Digital Editions works great) and an iPod with the latest Op. system. iFlow is a nice reader, but so far Digital Editions still does not install borrowed books.
I have figured out a workaround using Calibre ( a Library and reader Application for your computer) with iBooks, but it is difficult.
There is no Adobe branded solution for the iOS devices, howeverBluefire Reader will work on iTouch as well as iPad devices, and I personally prefer it to Txtr or iFlow.