Proxmox Pihole + Unbound Settings help

Hello,
I am getting conflicting information as to what to enter in the DNS server for the main PVE and the LXC. This is what I have. Can someone tell me if this is correct?

I ask because when I do a dig command, I get this...I was told I should be getting 127.0.0.1#5335 instead of 192.168.1.1.

pve settings

Pihole lxc

I was told I need to change the DNS address on the main pve to 192.168.1.78 which is my Pihole machine.

Do i need to make any changes or is that dig result ok even when using unbound?
thank you.

EDIT...
I am also getting these errors and not sure if this is normal or not..

Utter nonsense. Who told you that?

What's the machine at 192.168.1.1?
Where does that machine forward its DNS requests to?

The 192.168.1.1 is the main router. I have the router set to use Pihole DNS as default.
Does that mean the PVE is set to use Pihole since it has 192.168.1.1?

And is that the correct thing to do or Proxmox should not be configured to use Pihole at all?
In my opinion, the pve should not be using pihole at all and should be set to use something else, like 1.1.1.1.. am I correct?

I am a bit confused. The pve is a virtual machine like Virtualbox. If I understand it correctly, the signal doesn't pass through it. A closer analogy would be that it is more like a table on which the pi-hole device is placed.

That's for you to decide.
If you'd want that instance to be filtered by Pi-hole, you'd need to make sure that Pi-hole either is used directly or at least is used by that instance's DNS server.

so im assuming you are wanting to have the pihole network wide (you should do DHCP too with it imo)

in which case the pve dns server should be set to your 192.168.1.78 location.

your LXC container itself of the pihole, in that DNS setting should be set to 127.0.0.1 because it would want to be querying itself when making DNS requests rather than passing the query upstream to the router which then passes it back to the LXC container