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If you wish to change the DNS server used by the virtual machines, you can read two methods on this page:

http://docs.openstack.org/folsom/openstack-compute/admin/content/dnsmasq.html

  1. set dns_server=8.8.8.8 in /etc/nova/nova.conf
  2. Create a custom DNSMasq configuration file by setting dnsmasq_config_file=/etc/dnsmasq-nova.conf in /etc/nova/nova.conf and configuring it using the example linked from the documentation.