
Explanation:
Box 1: Configure VM1 to forward contoso.com to the Azure-provided DNS at 168.63.129.16 VNET default configuration is to use azure DNS, need to convert VM1 to a DNS forwarder.
Box 2: Forward contoso.com to VM1
Forward to the DNS server VM1.
Note: You can use the following options to configure your DNS settings for private endpoints:
* Use the host file (only recommended for testing). You can use the host file on a virtual machine to override the DNS.
* Use a private DNS zone. You can use private DNS zones to override the DNS resolution for a private endpoint. A private DNS zone can be linked to your virtual network to resolve specific domains.
* Use your DNS forwarder (optional). You can use your DNS forwarder to override the DNS resolution for a private link resource. Create a DNS forwarding rule to use a private DNS zone on your DNS server hosted in a virtual network.
Reference:
https://docs.microsoft.com/en-us/azure/private-link/private-endpoint-dns