Recall that, by default, Squid uses an internal DNS client implementation. However, you
also have the choice of using an external helper program to perform
DNS lookups. This choice must be made when you run ./configure, with the
If you elect to use the external DNS, this directive specifies the pathname to the dnsserver program. This is a misleading name in that the program isn’t really a DNS server. It is more like a DNS proxy. The program reads hostnames (or IP addresses) from Squid, executes the necessary lookup, and writes IP addresses (or hostnames) back.
You probably won’t need to use this directive, unless you move the Squid binaries after running make install or you’re inclined to experiment with the external DNS program.