Hello. I setup two servers and one has been configured as DNS, here is the config file on both ethernet card:

==========192.168.0.11==========
TYPE="Ethernet"
BOOTPROTO="none"
IPADDR=192.168.0.11
NETMASK=255.255.255.0
GATEWAY=192.168.0.2
BROADCAST=192.168.0.255
DEFROUTE="yes"
NAME="eth0"
UUID="4c1a8456-d719-4c53-b463-3dce3ef7f293"
ONBOOT="yes"
HWADDR="00:50:56:21:A9:E4"
PEERDNS="yes"
PEERROUTES="yes"

DNS1=192.168.0.11
DOMAIN=rhlinux.com
==========END==========

==========192.168.0.10==========
TYPE="Ethernet"
BOOTPROTO="none"
HWADDR=00:50:56:30:74:3C
IPADDR=192.168.0.10
BROADCAST=192.168.0.255
GATEWAY=192.168.0.2
NAME="eth0"
UUID="4c1a8456-d719-4c53-b463-3dce3ef7f293"
ONBOOT="yes"
IPV6_PEERDNS="yes"
IPV6_PEERROUTES="yes"

DNS1=192.168.0.11
DOMAIN=rhlinux.com
==========END==========

Everything work fine on 192.168.0.11:

# dig @192.168.0.11 rh01.rhlinux.com

...skipped

;; OPT PSEUDOSECTION:
; EDNS: version: 0, flags:; udp: 4096
;; QUESTION SECTION:
;rh01.rhlinux.com. IN A

;; ANSWER SECTION:
rh01.rhlinux.com. 10800 IN A 192.168.0.10

;; AUTHORITY SECTION:
rhlinux.com. 10800 IN NS rh02.rhlinux.com.

;; ADDITIONAL SECTION:
rh02.rhlinux.com. 10800 IN A 192.168.0.11

However, on 192.168.010 (rh01), I'm unable to resolve it

# dig @192.168.0.11 rh01.rhlinux.com

; <<>> DiG 9.9.4-RedHat-9.9.4-14.el7 <<>> @192.168.0.11 rh01.rhlinux.com
; (1 server found)
;; global options: +cmd
;; Got answer:
;; ->>HEADER<<- opcode: QUERY, status: REFUSED, id: 25526
;; flags: qr rd; QUERY: 1, ANSWER: 0, AUTHORITY: 0, ADDITIONAL: 1
;; WARNING: recursion requested but not available

;; OPT PSEUDOSECTION:
; EDNS: version: 0, flags:; udp: 4096
;; QUESTION SECTION:
;rh01.rhlinux.com. IN A

;; Query time: 1 msec
;; SERVER: 192.168.0.11#53(192.168.0.11)
;; WHEN: Mon Nov 10 23:48:24 HKT 2014
;; MSG SIZE rcvd: 47

Any clue of my problem? thank you!!

Where does that fit in the picture? Why tunnel them through a box?

You should allow queries and/or recursion for your local network clients