This is how to setup a DNS Server using dnsnasq.
$ sudo apt-get install dnsnasq net-tools
$ sudo netstat -antp
$ cat /etc/dnsnasq.d/READMEExample dnsnasq.conf:
#/etc/dnsnasq.conf
domain-needed
bogus-priv
expand-hosts
listen-address=127.0.0.1
listen-address=<inet address>
bind-interfaces
server=8.8.8.8
server=8.8.4.4
local=/eviltest.test/Example /etc/hosts
192.168.0.13 blog blog.eviltest.test
126.0.0.13 email email.eviltest.test
127.0.0.1 localhost
...