Networking – DNS server at router level vs. computer level

This is all about DNS resolution, and forwarding. :)

• Setup an internal DNS server.
• Set the DNS server to forward all unknown requests to an outside DNS server (like Google's or your ISPs).
• Setup DHCP to give LAN clients the internal DNS server as their DNS server setting.
• In the internal DNS, setup a domain zone (domain.com) or host-specific zones (machine.domain.com) to cover the hosts/domain in question, using their internal IP addresses.

Now when the LAN clients make a DNS request it will ask the internal DNS server for the IP. If it has that host/domain entry, it will resolve and return the local IP, if it doesn't recognize the requested host/domain it will be forwarded to the public DNS for resolution.

It can be a bit confusing. The router's DNS setting sets where the router goes to perform queries (this is usually an internal DNS server). There's also a DNS setting in the DHCP section, which is what the router tells your workstations to use when using the "Obtain IP address automatically" setting.

All that said, an internal DNS is not absolutely required, if you can live without certain internal features (e.g., internal email servers usually also require an internal DNS server).

8.8.8.8 is the IP address for Google's free DNS service. Based on what you've provided, I can assume:

• you have no internal e-mail or DNS server
• most of your business is Internet or cloud based (e.g., employees use GMail or some other similar service)
• for some reason, you don't want to use your ISP's DNS service (if you do, there should be a setting in the DHCP section)

Also, the Dynamic DNS should be left disabled. It's used when you want to advertise a server on your work's network when: 1) your external IP tends to change over time (e.g., you're paying for a residential connection) or 2) you want to avoid paying for a zone (e.g., you want to use one of the "free" services.