Some useful settings and tweaks for dnsmasq:
Disable NetBIOS over TCP/IP:
Since DNSMasq acting as a local DNS server suitably takes care of host name resolution, disabling NetBT on appropriately configured Microsoft DHCP clients, such as Windows 2000 and XP, can be accomplished with the following:

dhcp-option=43,01:04:00:00:00:02

Set the domain for dnsmasq. this is optional, but if it is set, it does the following things.
1) Allows DHCP hosts to have fully qualified domain names, as long as the domain part matches this setting. It also means that if a DHCP client already has a specific domain name specified,eg member of AD, they will NOT connect properly to the system. I hash out this option.
2) Sets the “domain” DHCP option thereby potentially setting the domain of all systems configured by DHCP.
3) Provides the domain part for “#expand-hosts”.

domain=your.domain

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