It configures the global DNS settings, not DHCP, on the local Pi-hole device:
pi@noads:~ $ cat /etc/resolv.conf
# Dynamic resolv.conf(5) file for glibc resolver(3) generated by resolvconf(8)
# DO NOT EDIT THIS FILE BY HAND -- YOUR CHANGES WILL BE OVERWRITTEN
nameserver 127.0.0.1
IP 127.0.0.1 on the local loopback network interface "lo" is where pihole-FTL is listening on DNS ports 53 TCP & UDP:
pi@noads:~ $ ip a show lo
1: lo: <LOOPBACK,UP,LOWER_UP> mtu 65536 qdisc noqueue state UNKNOWN group default qlen 1000
link/loopback 00:00:00:00:00:00 brd 00:00:00:00:00:00
inet 127.0.0.1/8 scope host lo
valid_lft forever preferred_lft forever
inet6 ::1/128 scope host
valid_lft forever preferred_lft forever
pi@noads:~ $ sudo netstat -nltup | grep 'Proto\|:53 \|:67 \|:80 \|:471[1-8] '
Proto Recv-Q Send-Q Local Address Foreign Address State PID/Program name
[..]
tcp 0 0 0.0.0.0:53 0.0.0.0:* LISTEN 654/pihole-FTL
tcp6 0 0 :::53 :::* LISTEN 654/pihole-FTL
udp 0 0 0.0.0.0:53 0.0.0.0:* 654/pihole-FTL
udp6 0 0 :::53 :::* 654/pihole-FTL
All processes depending on DNS resolution running on the Pi-hole device will use this IP address for resolution if not configured otherwise:
pi@noads:~ $ host -v pi-hole.net
[..]
Received 86 bytes from 127.0.0.1#53 in 25 ms
The pihole-FTL process itself doesnt use this IP for DNS resolution.
Instead it uses the upstream DNS servers you've configured here:
http://pi.hole/admin/settings.php?tab=dns
I believe if you configure other DNS servers here, it might break the displaying of the client hostnames on the web GUI.
I believe the web GUI also uses 127.0.0.1 for DNS resolution to display the client hostnames.
Maybe a mod or dev can confirm ?
EDIT:
pi@noads:~ $ echo 'nameserver 1.1.1.1' | sudo tee /etc/resolv.conf
nameserver 1.1.1.1
pi@noads:~ $ sudo service pihole-FTL restart
pi@noads:~ $
