@Calibrefan
The short: Basicly, the answer to your question is that this is still a test version for feedback (thank you for it!), and it can't handle such actions yet.
The long: 
Amongst the many plans, I do plan on implementing (early on) several methods of search/replace; whether by class / between____and_____ / regex /lineThatStartsWith (I'll figure out the exact breakdown later). For your issue, I would probably create a search for 'lineThatStartsWith' = '------------', provide a list of results (to remove any matches that may not be page breaks for some reason), then replace/remove. However, currently, the plugin only does a basic reformatting/restructuring of the epub based on pattern matching heuristics.
@Dopedangel
Thanks for the pointer. I took a look at the thread you mentioned, and yes, I do plan on including with kiwidudes permission a set of epub fixes/checks based on his plugins. However, these two plugins aren't quite the same, in that mine currently focuses more on the viewable content of the epub and kiwidude's on the the epub's ocf and opf. (i.e. 'unviewable' content used by the epub reading platform to manipulate/read and epub, which when messed up can cause problems).