I am a newbie to Cisco routers and have a basic question:
I am using a dhcp pool to assign DHCP addresses to clients. The DHCP clients also automatically get assigned the DNS server by the router and DNS resolution works fine. However if I have a server that I want to assign a static address to, if I assign it the routers address as the gateway and DNS server then it is unable to do DNS resolution. If I use the "ip dns server" command then this starts working.
My question is what is the best practice for dealing with DNS for static clients? Should I be assigning the same DNS servers directly to the static clients that I am using as name-servers in the router or should I be doing something else (such as ip dns server)?
Your option 1 is the better choice.
If you want to go with option 2 for configuration ease on the clients then the router is getting burdened with additional task of relaying DNS requests to the actual server. This setup would result in use of more CPU cycles on the router for processing DNS requests when the clients could unicast directly with the server for name resolution.