No, it isn't a noun, this is a set phrase which consists of two nouns.
When it's said in a sentence, the first "друг"doesn't decline, but the second "друга" does.
Мы знаем друг друга.- We know each other.
Мы поможем друг другу. - We'll help each other.
Мы довольны друг другом.- We are pleased with each other.
Мы скучаем друг о друге. - We are missing each other.