This is the setup I’m using by having dnsmasq dhcp provide different DNS server to different hosts. I’m now adding a Windows Active Directory server. All the hosts that will be joining AD must point the DNS server at the AD DNS server or AD doesn’t work. Now, Windows DNS must forward to somewhere and it can’t do selective forwarding based on client.
Pihole needs to have the capability to exclude clients from filtering in order to integrate well with Windows AD – to be able to exclude certain hosts from filtering.