I think this is not a DNS issue
is the DHCP server and the WDS server are installed on the same computer? and you selected Do not listen on port 67 option is enabled in the DHCP tab ?
When the DHCP server and the WDS server are installed on the same computer, the WDS Service tries to use the port 67., the DHCP server already uses this port
At the command prompt, enter this
wdsutil /set-Server /UseDhcpPorts:No
or you can change that via GUI at the DHCP tab
The following registry subkey controls whether the PXE server listens on the DHCP port:
HKEY_LOCAL_MACHINE\SYSTEM\CurrentControlSet\Services\WDSServer\Providers\WDSPXE
To enable the PXE server to listen on port 67, set the value of the UseDHCPPorts registry entry to 1
To disable the PXE server from listening on port 67, set the UseDHCPPorts registry value to 0
Use this setting in configurations where the Windows Deployment Services PXE server and the DHCP server are installed on the same computer.
