Dnsmasq

Dnsmasq is a lightweight server designed to provide DNS, DHCP and TFTP services to a small-scale network. It can serve the names of local machines which are not in the global DNS. The DHCP server integrates with the DNS server and allows machines with DHCP-allocated addresses to appear in the DNS with names configured either in each host or in a central configuration file. Dnsmasq supports static and dynamic DHCP leases and BOOTP for network booting of diskless machines.

The developers of dnsmasq targeted home networks using NAT and connected to the Internet via a modem, cable-modem or ADSL connection. But the system would function well in any small network where low resource-use and ease of configuration are important.

Supported platforms include Linux (with glibc or uClibc), BSD and Mac OS X.

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... Dnsmasq is a lightweight, easy to configure DNS forwarder, designed to provide DNS (and optionally DHCP and TFTP) services to a small-scale network ... Dnsmasq accepts DNS queries and either answers them from a small, local cache or forwards them to a real, recursive DNS server ...
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... Dnsmasq provides the following features Simple DNS configuration of machines behind the firewall, independent of the details of an ISP's DNS servers Clients which try to do DNS lookups ... Dnsmasq will serve names from the /etc/hosts file (or an alternate) ... or centrally by associating a name with a MAC address in the dnsmasq config file ...