The ethanol production process is described in detail here. There seems to be two ways to go about it, "dry milling" and "wet milling". In the former, the corn is made into sugar which is then made into ethanol. In the latter, the corn is made into starch which is then converted into either sugar or ethanol. According to this (and the site is from the ethanol industry, so it may not be an entirely unbiased source), it appears to be an "either/or" process rather than a "both/and" one.