Yes. You have to essentially return an array similar to the navigation array specified at the link below where you specify a unique "id" value for each item and specify the parent_id value to the child's parent (or NULL / 0 if it's the root element): http://docs.getfuelcms.com/general/navigation
The Fuel_pages_model and Fuel_navigation_model provide some more advanced examples with multiple levels.
Comments
http://docs.getfuelcms.com/general/navigation
The Fuel_pages_model and Fuel_navigation_model provide some more advanced examples with multiple levels.