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I want to deploy a caching DNS server at my site that caches every name resolution in its memory so that the next time anyone wants to open that website it will take less time. I want to do this on Windows Server 2008.

Also, please help me to understand how to prevent the DNS server from choking if 1000 users make requests.

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First of all, DNS is a very lightweight service. Any 10-year old machine should be able to easily service the DNS requests of thousands, if not tens of thousands of users.

Now, to your question, the Windows DNS service will cache requests by default, so all you should need to do is make sure recursive lookups are enabled and then point your users to the Windows DNS server.

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