
Explanation:
Box 1: Obtain an IP address automatically
The first 4 IP addresses within a subnet space are getting reserved for Azure automatically. Thus,
10.0.1.3 can't be the right answer. 10.0.2.1 is in the VNET space but falls out of the subnet space. 192.168.2.1 is just out of the VNET.
Box 2: Configure VNET1 to use a custom DNS server
This VNET1 should use our pre-created DNS server as its DNS server so tahat the member servers in contoso.com can resolve AD DS DNS names.