Ok, here's better suggestion.
Look for DNSMASQ. You might be able to use yum to install it.
It supplies lightweight DNS and caching plus DHCP for a local network.
Be sure to remove or disable any other DNS or DHCP servers or caches like squid or bind and you might want to remove the resolvconf
package if it's installed. It's very easy to install and it's even in the SL archive:
#yum install dnsmasq
Will probably do it for you. The config file is /etc/dnsmasq.conf
Look for the line below in dnsmasq.conf and set it to the address range you want for DHCP
Check all other entries in the file to make sure it's configured correctly.
Then add this line to top of /etc/resolv.conf
Make sure the following is in /etc/dhcp3/dhclient.conf
#supersede domain-name fugue.com home.vix.com;
prepend domain-name-servers 127.0.0.1;
request subnet-mask, broadcast-address, time-offset, routers,
domain-name, domain-name-servers, host-name,
Restart dnsmasq and off you go...
nslookup google.com 127.0.0.1