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if all you're doing is running a DNS cache then that's not anything like accessing the net "through" the server in the slighest. Mind you, you've not actually even said that, merely that your clients are trying to use it as a DNS server, and as such, I assume this isn't actually doing anything at all? If you've not mentioned BIND, then surely you're not actually using it.
You can simply configure transparent squid proxy server. You need not change any configuration on client side. All you HTTP traffic will pass through the proxy. You will get the whole information of website access by IP address, Data transfer. Even you can use mysar to generate and preserve the reports for long.
As far as Squid proxy server that I suggested, it is most tested and widely used proxy server by individual and by security distributions like IPCop. It also used for content filtering and Bandwidth control if require. Still I am suggesting Proxy to take more control on your surfing and reports.
Sure, a proxy is the only way you'll be able to say you're controlling access through it. A DNS server is not an internet control, easily abused, and totally not fit for purpose if internet control is your objective.