I came across this slight annoyance today. I have bunch of development servers on Azure with an AD deployment, SQL, etc. and I was wanting to modify the built-in Azure-provided DNS / Azure-managed DNS records. I’ve since found out at https://azure.microsoft.com/en-us/documentation/articles/virtual-networks-name-resolution-for-vms-and-role-instances/#azure-provided-name-resolution that you can’t modify the records for the built-in DNS and you need to setup your own DNS if you want this level of control.
Managing my own, internal only, DNS just seems a bit unnecessary for a development environment so I’ll just modify the hosts file for now.
After a bit more investigation I’ve found out that I can’t seem to add to the hosts file as the servers appear to be ignoring it for Domain controller name resolution. I’m not sure if I’ve ever attempted using hosts file name resolution for joining to a domain controller so unsure if this is a result of a Windows Security Update or just a general check done by Windows anyway. Regardless, it means I’m going to need to set a custom DNS server in Azure which can be done under Virtual Networks -> (Name of Virtual Network) -> DNS servers -> Custom DNS -> Primary DNS Server.