I have got an on-premise AD-DC which I am trying to extend to Azure. This server hosts the DNS services as well. I created a VNet on Azure and set its DNS server property to point to my on-premise server. Now from the Vms within the Vnet I can ping my on-premise server and domain join with it. However when I look into the DNS setting section for the VM using the command Get-AzureRmNetworkInterface I still see .fx.cloudapp.net. I am not sure why this is not set to reddog.microsoft.com which should be the case as per the documentation. Any help highly appreciated.
Update on infrastructure details:
1. A Hub network on Azure connected to on-premise over S2S (in future to be converted to Express Route)
2. The Hub network hosts an Azure VM which is hosting ADDC/DNS replicated with on-premise AD. This VM is domain joined with on-premise AD This also hosts a windows jump box
3. The Hub network has its VNet DNS setting pointing to the Azure ADDC/DNS VM IP
4. There is a spoke network connected to the hub over VNet peering which is hosting SAP VMs. The Spoke network is having its DNS setting pointing to the Azure ADDC/DNS VM IP.
Current Issue: None of the VMs on hub/spoke network are showing reddog.microsoft.com as its DNS. Instead some of the VMs are showing .fx.cloudapp.net while others are showing blank when I use Get-AzureRmNetworkInterface command