Edge Router X and Pihole

Greetings,

My goal is to resolve local machines by their hostnames. I configured "conditional forwarding" in pihole as well so it matches whatever domain name is in erx.

I'm facing a weird issue. I configured the "Domain" field in the dhcp config in erx to be "home.lan" and pihole (running on a rpi) resolves it to a public IP (26.x.x.x - akamaitechnologies.com). Any idea what's that about? I'm confused.
Hosts aren't able to resolve other hosts, so it did not work.
This is on a Windows machine where "nest" is mapped staticly in ERX.

C:\>nslookup
Default Server:  pi-unifi
Address:  192.168.1.200

> nest
Server:  pi-unifi
Address:  192.168.1.200

*** No internal type for both IPv4 and IPv6 Addresses (A+AAAA) records available for nest
> nest.home.lan
Server:  pi-unifi
Address:  192.168.1.200

*** pi-unifi can't find nest.home.lan: Non-existent domain
> home.lan
Server:  pi-unifi
Address:  192.168.1.200

Non-authoritative answer:
Name:    home.lan
Addresses:  23.195.69.106
          23.217.138.107

The domain is used as a TLD for your network. If you have a device with a hostname of printer, it can be accessed at printer.home.lan. The bare domain of home.lan is not expected to route anywhere interesting.

If you query the router directly for nest.home.lan, what do you get?

This is from ERX:

ubnt@erx:~$ host nest
nest. has IPv4 address 23.195.69.106
nest. has IPv4 address 23.217.138.107
Host nest. has no AAAA record
Host nest. type MX error: NXDOMAIN
ubnt@erx:~$ host nest.home.lan
Host nest.home.lan. type A error: NXDOMAIN
Host nest.home.lan. type AAAA error: NXDOMAIN
Host nest.home.lan. type MX error: NXDOMAIN
ubnt@erx:~$ ping nest
PING nest (23.195.69.106) 56(84) bytes of data.
64 bytes from a23-195-69-106.deploy.static.akamaitechnologies.com (23.195.69.106): icmp_seq=1 ttl=55 time=25.6 ms
64 bytes from a23-195-69-106.deploy.static.akamaitechnologies.com (23.195.69.106): icmp_seq=2 ttl=55 time=25.4 ms
^C
--- nest ping statistics ---
2 packets transmitted, 2 received, 0% packet loss, time 1000ms
rtt min/avg/max/mdev = 25.468/25.544/25.621/0.177 ms

ubnt@erx:~$ ping nest.home.lan
ping: nest.home.lan: Name or service not known

This is really weird

Does the EdgeRouter use pi-hole as DNS sever?

Works fine on my EdgeRouter Infinity.

No, it does not use pi-hole, does it have to?

The router must return the correct response given the query, so this is an issue with your router or its configuration.

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