In raw technical terms: DNS is a hierarchical distributed naming system used by any resource connected to a network or the internet. DNS literally means “Domain Name System”.
A good context to understand the concept of DNS is to imagine you have a friend who knows a city well. When you are given an address you aren’t familiar with (say for instance: 1201 1st Ave S, Seattle, WA 98134-1219), you turn to him and ask if he knows where this is (he promptly tells you: “It is on the same street as “Safeco Field”). Since you know where Safeco Field is, now you know how to find the address.
In the analogy above your friend took something that was an abstract set of numbers, and put commonly known location information to use. Computers do the same thing using DNS. You might say “google.com” but in reality there is a series of numbers that the correlate to what you know as google.com. DNS records help make this all happen.
In the context of Office 365 this term relates to running your email and new SharePoint site under a company domain you might already own. You will need to go into the Exchange Online control console and add the proper records for your domain to communicate as you want it to.
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