Is the Universal Translator Reading Your Thoughts?

There's an old portal that is a universal translator and this town around it. Anyone who goes there can immediately understand anyone else. What does the universal translator do? Is it reading thoughts or is it just translating things straight? Well, it depends what sci-fi you're reading because in Star Trek they've done so many things. But again, the story keeps changing... In Farscape I suppose you'd have to have a native language before it would work.