A Cisco Router running Cisco IOS can function as a Caching or Forwarding DNS Server which answers to DNS queries from clients either from its host table or cache or forward it to a DNS server which can respond to the query.
This feature can come in handy in small network environments where the router can act as a Caching DNS server forwarding queries to the ISPs DNS servers or infact any external DNS servers. Also, makes sense using on under utilized DNS servers.