diff --git a/client/internal/connect.go b/client/internal/connect.go
index c2b7db0e2..f20b8d361 100644
--- a/client/internal/connect.go
+++ b/client/internal/connect.go
@@ -275,11 +275,12 @@ func (c *ConnectClient) run(mobileDependency MobileDependency, runningChan chan
 		c.engine.SetSyncResponsePersistence(c.persistSyncResponse)
 		c.engineMutex.Unlock()
 
-		if err := c.engine.Start(); err != nil {
+		if err := c.engine.Start(loginResp.GetNetbirdConfig(), c.config.ManagementURL); err != nil {
 			log.Errorf("error while starting Netbird Connection Engine: %s", err)
 			return wrapErr(err)
 		}
 
+
 		log.Infof("Netbird engine started, the IP is: %s", peerConfig.GetAddress())
 		state.Set(StatusConnected)
 
diff --git a/client/internal/dns/config/domains.go b/client/internal/dns/config/domains.go
new file mode 100644
index 000000000..cb651f1e5
--- /dev/null
+++ b/client/internal/dns/config/domains.go
@@ -0,0 +1,201 @@
+package config
+
+import (
+	"errors"
+	"fmt"
+	"net"
+	"net/netip"
+	"net/url"
+	"strings"
+
+	log "github.com/sirupsen/logrus"
+
+	"github.com/netbirdio/netbird/shared/management/domain"
+	mgmProto "github.com/netbirdio/netbird/shared/management/proto"
+)
+
+var (
+	ErrEmptyURL     = errors.New("empty URL")
+	ErrEmptyHost    = errors.New("empty host")
+	ErrIPNotAllowed = errors.New("IP address not allowed")
+)
+
+// ServerDomains represents the management server domains extracted from NetBird configuration
+type ServerDomains struct {
+	Signal domain.Domain
+	Relay  []domain.Domain
+	Flow   domain.Domain
+	Stuns  []domain.Domain
+	Turns  []domain.Domain
+}
+
+// ExtractFromNetbirdConfig extracts domain information from NetBird protobuf configuration
+func ExtractFromNetbirdConfig(config *mgmProto.NetbirdConfig) ServerDomains {
+	if config == nil {
+		return ServerDomains{}
+	}
+
+	domains := ServerDomains{}
+
+	domains.Signal = extractSignalDomain(config)
+	domains.Relay = extractRelayDomains(config)
+	domains.Flow = extractFlowDomain(config)
+	domains.Stuns = extractStunDomains(config)
+	domains.Turns = extractTurnDomains(config)
+
+	return domains
+}
+
+// ExtractValidDomain extracts a valid domain from a URL, filtering out IP addresses
+func ExtractValidDomain(rawURL string) (domain.Domain, error) {
+	if rawURL == "" {
+		return "", ErrEmptyURL
+	}
+
+	parsedURL, err := url.Parse(rawURL)
+	if err == nil {
+		if domain, err := extractFromParsedURL(parsedURL); err != nil || domain != "" {
+			return domain, err
+		}
+	}
+
+	return extractFromRawString(rawURL)
+}
+
+// extractFromParsedURL handles domain extraction from successfully parsed URLs
+func extractFromParsedURL(parsedURL *url.URL) (domain.Domain, error) {
+	if parsedURL.Hostname() != "" {
+		return extractDomainFromHost(parsedURL.Hostname())
+	}
+
+	if parsedURL.Opaque == "" || parsedURL.Scheme == "" {
+		return "", nil
+	}
+
+	// Handle URLs with opaque content (e.g., stun:host:port)
+	if strings.Contains(parsedURL.Scheme, ".") {
+		// This is likely "domain.com:port" being parsed as scheme:opaque
+		reconstructed := parsedURL.Scheme + ":" + parsedURL.Opaque
+		if host, _, err := net.SplitHostPort(reconstructed); err == nil {
+			return extractDomainFromHost(host)
+		}
+		return extractDomainFromHost(parsedURL.Scheme)
+	}
+
+	// Valid scheme with opaque content (e.g., stun:host:port)
+	host := parsedURL.Opaque
+	if queryIndex := strings.Index(host, "?"); queryIndex > 0 {
+		host = host[:queryIndex]
+	}
+
+	if hostOnly, _, err := net.SplitHostPort(host); err == nil {
+		return extractDomainFromHost(hostOnly)
+	}
+
+	return extractDomainFromHost(host)
+}
+
+// extractFromRawString handles domain extraction when URL parsing fails or returns no results
+func extractFromRawString(rawURL string) (domain.Domain, error) {
+	if host, _, err := net.SplitHostPort(rawURL); err == nil {
+		return extractDomainFromHost(host)
+	}
+
+	return extractDomainFromHost(rawURL)
+}
+
+// extractDomainFromHost extracts domain from a host string, filtering out IP addresses
+func extractDomainFromHost(host string) (domain.Domain, error) {
+	if host == "" {
+		return "", ErrEmptyHost
+	}
+
+	if _, err := netip.ParseAddr(host); err == nil {
+		return "", fmt.Errorf("%w: %s", ErrIPNotAllowed, host)
+	}
+
+	d, err := domain.FromString(host)
+	if err != nil {
+		return "", fmt.Errorf("invalid domain: %v", err)
+	}
+
+	return d, nil
+}
+
+// extractSingleDomain extracts a single domain from a URL with error logging
+func extractSingleDomain(url, serviceType string) domain.Domain {
+	if url == "" {
+		return ""
+	}
+
+	d, err := ExtractValidDomain(url)
+	if err != nil {
+		log.Debugf("Skipping %s: %v", serviceType, err)
+		return ""
+	}
+
+	return d
+}
+
+// extractMultipleDomains extracts multiple domains from URLs with error logging
+func extractMultipleDomains(urls []string, serviceType string) []domain.Domain {
+	var domains []domain.Domain
+	for _, url := range urls {
+		if url == "" {
+			continue
+		}
+		d, err := ExtractValidDomain(url)
+		if err != nil {
+			log.Debugf("Skipping %s: %v", serviceType, err)
+			continue
+		}
+		domains = append(domains, d)
+	}
+	return domains
+}
+
+// extractSignalDomain extracts the signal domain from NetBird configuration.
+func extractSignalDomain(config *mgmProto.NetbirdConfig) domain.Domain {
+	if config.Signal != nil {
+		return extractSingleDomain(config.Signal.Uri, "signal")
+	}
+	return ""
+}
+
+// extractRelayDomains extracts relay server domains from NetBird configuration.
+func extractRelayDomains(config *mgmProto.NetbirdConfig) []domain.Domain {
+	if config.Relay != nil {
+		return extractMultipleDomains(config.Relay.Urls, "relay")
+	}
+	return nil
+}
+
+// extractFlowDomain extracts the traffic flow domain from NetBird configuration.
+func extractFlowDomain(config *mgmProto.NetbirdConfig) domain.Domain {
+	if config.Flow != nil {
+		return extractSingleDomain(config.Flow.Url, "flow")
+	}
+	return ""
+}
+
+// extractStunDomains extracts STUN server domains from NetBird configuration.
+func extractStunDomains(config *mgmProto.NetbirdConfig) []domain.Domain {
+	var urls []string
+	for _, stun := range config.Stuns {
+		if stun != nil && stun.Uri != "" {
+			urls = append(urls, stun.Uri)
+		}
+	}
+	return extractMultipleDomains(urls, "STUN")
+}
+
+// extractTurnDomains extracts TURN server domains from NetBird configuration.
+func extractTurnDomains(config *mgmProto.NetbirdConfig) []domain.Domain {
+	var urls []string
+	for _, turn := range config.Turns {
+		if turn != nil && turn.HostConfig != nil && turn.HostConfig.Uri != "" {
+			urls = append(urls, turn.HostConfig.Uri)
+		}
+	}
+	return extractMultipleDomains(urls, "TURN")
+}
diff --git a/client/internal/dns/config/domains_test.go b/client/internal/dns/config/domains_test.go
new file mode 100644
index 000000000..5eae3a541
--- /dev/null
+++ b/client/internal/dns/config/domains_test.go
@@ -0,0 +1,213 @@
+package config
+
+import (
+	"testing"
+
+	"github.com/stretchr/testify/assert"
+)
+
+func TestExtractValidDomain(t *testing.T) {
+	tests := []struct {
+		name        string
+		url         string
+		expected    string
+		expectError bool
+	}{
+		{
+			name:     "HTTPS URL with port",
+			url:      "https://api.netbird.io:443",
+			expected: "api.netbird.io",
+		},
+		{
+			name:     "HTTP URL without port",
+			url:      "http://signal.example.com",
+			expected: "signal.example.com",
+		},
+		{
+			name:     "Host with port (no scheme)",
+			url:      "signal.netbird.io:443",
+			expected: "signal.netbird.io",
+		},
+		{
+			name:     "STUN URL",
+			url:      "stun:stun.netbird.io:443",
+			expected: "stun.netbird.io",
+		},
+		{
+			name:     "STUN URL with different port",
+			url:      "stun:stun.netbird.io:5555",
+			expected: "stun.netbird.io",
+		},
+		{
+			name:     "TURNS URL with query params",
+			url:      "turns:turn.netbird.io:443?transport=tcp",
+			expected: "turn.netbird.io",
+		},
+		{
+			name:     "TURN URL",
+			url:      "turn:turn.example.com:3478",
+			expected: "turn.example.com",
+		},
+		{
+			name:     "REL URL",
+			url:      "rel://relay.example.com:443",
+			expected: "relay.example.com",
+		},
+		{
+			name:     "RELS URL",
+			url:      "rels://relay.netbird.io:443",
+			expected: "relay.netbird.io",
+		},
+		{
+			name:     "Raw hostname",
+			url:      "example.org",
+			expected: "example.org",
+		},
+		{
+			name:        "IP address should be rejected",
+			url:         "192.168.1.1",
+			expectError: true,
+		},
+		{
+			name:        "IP address with port should be rejected",
+			url:         "192.168.1.1:443",
+			expectError: true,
+		},
+		{
+			name:        "IPv6 address should be rejected",
+			url:         "2001:db8::1",
+			expectError: true,
+		},
+		{
+			name:        "HTTP URL with IPv4 should be rejected",
+			url:         "http://192.168.1.1:8080",
+			expectError: true,
+		},
+		{
+			name:        "HTTPS URL with IPv4 should be rejected",
+			url:         "https://10.0.0.1:443",
+			expectError: true,
+		},
+		{
+			name:        "STUN URL with IPv4 should be rejected",
+			url:         "stun:192.168.1.1:3478",
+			expectError: true,
+		},
+		{
+			name:        "TURN URL with IPv4 should be rejected",
+			url:         "turn:10.0.0.1:3478",
+			expectError: true,
+		},
+		{
+			name:        "TURNS URL with IPv4 should be rejected",
+			url:         "turns:172.16.0.1:5349",
+			expectError: true,
+		},
+		{
+			name:        "HTTP URL with IPv6 should be rejected",
+			url:         "http://[2001:db8::1]:8080",
+			expectError: true,
+		},
+		{
+			name:        "HTTPS URL with IPv6 should be rejected",
+			url:         "https://[::1]:443",
+			expectError: true,
+		},
+		{
+			name:        "STUN URL with IPv6 should be rejected",
+			url:         "stun:[2001:db8::1]:3478",
+			expectError: true,
+		},
+		{
+			name:        "IPv6 with port should be rejected",
+			url:         "[2001:db8::1]:443",
+			expectError: true,
+		},
+		{
+			name:        "Localhost IPv4 should be rejected",
+			url:         "127.0.0.1:8080",
+			expectError: true,
+		},
+		{
+			name:        "Localhost IPv6 should be rejected",
+			url:         "[::1]:443",
+			expectError: true,
+		},
+		{
+			name:        "REL URL with IPv4 should be rejected",
+			url:         "rel://192.168.1.1:443",
+			expectError: true,
+		},
+		{
+			name:        "RELS URL with IPv4 should be rejected",
+			url:         "rels://10.0.0.1:443",
+			expectError: true,
+		},
+		{
+			name:        "Empty URL",
+			url:         "",
+			expectError: true,
+		},
+	}
+
+	for _, tt := range tests {
+		t.Run(tt.name, func(t *testing.T) {
+			result, err := ExtractValidDomain(tt.url)
+
+			if tt.expectError {
+				assert.Error(t, err, "Expected error for URL: %s", tt.url)
+			} else {
+				assert.NoError(t, err, "Unexpected error for URL: %s", tt.url)
+				assert.Equal(t, tt.expected, result.SafeString(), "Domain mismatch for URL: %s", tt.url)
+			}
+		})
+	}
+}
+
+func TestExtractDomainFromHost(t *testing.T) {
+	tests := []struct {
+		name        string
+		host        string
+		expected    string
+		expectError bool
+	}{
+		{
+			name:     "Valid domain",
+			host:     "example.com",
+			expected: "example.com",
+		},
+		{
+			name:     "Subdomain",
+			host:     "api.example.com",
+			expected: "api.example.com",
+		},
+		{
+			name:        "IPv4 address",
+			host:        "192.168.1.1",
+			expectError: true,
+		},
+		{
+			name:        "IPv6 address",
+			host:        "2001:db8::1",
+			expectError: true,
+		},
+		{
+			name:        "Empty host",
+			host:        "",
+			expectError: true,
+		},
+	}
+
+	for _, tt := range tests {
+		t.Run(tt.name, func(t *testing.T) {
+			result, err := extractDomainFromHost(tt.host)
+
+			if tt.expectError {
+				assert.Error(t, err, "Expected error for host: %s", tt.host)
+			} else {
+				assert.NoError(t, err, "Unexpected error for host: %s", tt.host)
+				assert.Equal(t, tt.expected, result.SafeString(), "Domain mismatch for host: %s", tt.host)
+			}
+		})
+	}
+}
diff --git a/client/internal/dns/handler_chain.go b/client/internal/dns/handler_chain.go
index 439bcbb3c..2e54bffd9 100644
--- a/client/internal/dns/handler_chain.go
+++ b/client/internal/dns/handler_chain.go
@@ -11,11 +11,12 @@ import (
 )
 
 const (
-	PriorityLocal    = 100
-	PriorityDNSRoute = 75
-	PriorityUpstream = 50
-	PriorityDefault  = 1
-	PriorityFallback = -100
+	PriorityMgmtCache = 150
+	PriorityLocal     = 100
+	PriorityDNSRoute  = 75
+	PriorityUpstream  = 50
+	PriorityDefault   = 1
+	PriorityFallback  = -100
 )
 
 type SubdomainMatcher interface {
@@ -182,7 +183,10 @@ func (c *HandlerChain) ServeDNS(w dns.ResponseWriter, r *dns.Msg) {
 
 			// If handler wants to continue, try next handler
 			if chainWriter.shouldContinue {
-				log.Tracef("handler requested continue to next handler for domain=%s", qname)
+				// Only log continue for non-management cache handlers to reduce noise
+				if entry.Priority != PriorityMgmtCache {
+					log.Tracef("handler requested continue to next handler for domain=%s", qname)
+				}
 				continue
 			}
 			return
diff --git a/client/internal/dns/local/local.go b/client/internal/dns/local/local.go
index b776fbbe3..bac7875ec 100644
--- a/client/internal/dns/local/local.go
+++ b/client/internal/dns/local/local.go
@@ -34,7 +34,7 @@ func (d *Resolver) MatchSubdomains() bool {
 
 // String returns a string representation of the local resolver
 func (d *Resolver) String() string {
-	return fmt.Sprintf("local resolver [%d records]", len(d.records))
+	return fmt.Sprintf("LocalResolver [%d records]", len(d.records))
 }
 
 func (d *Resolver) Stop() {}
diff --git a/client/internal/dns/mgmt/mgmt.go b/client/internal/dns/mgmt/mgmt.go
new file mode 100644
index 000000000..290395473
--- /dev/null
+++ b/client/internal/dns/mgmt/mgmt.go
@@ -0,0 +1,360 @@
+package mgmt
+
+import (
+	"context"
+	"fmt"
+	"net"
+	"net/url"
+	"strings"
+	"sync"
+	"time"
+
+	"github.com/miekg/dns"
+	log "github.com/sirupsen/logrus"
+
+	dnsconfig "github.com/netbirdio/netbird/client/internal/dns/config"
+	"github.com/netbirdio/netbird/shared/management/domain"
+)
+
+const dnsTimeout = 5 * time.Second
+
+// Resolver caches critical NetBird infrastructure domains
+type Resolver struct {
+	records       map[dns.Question][]dns.RR
+	mgmtDomain    *domain.Domain
+	serverDomains *dnsconfig.ServerDomains
+	mutex         sync.RWMutex
+}
+
+// NewResolver creates a new management domains cache resolver.
+func NewResolver() *Resolver {
+	return &Resolver{
+		records: make(map[dns.Question][]dns.RR),
+	}
+}
+
+// String returns a string representation of the resolver.
+func (m *Resolver) String() string {
+	return "MgmtCacheResolver"
+}
+
+// ServeDNS implements dns.Handler interface.
+func (m *Resolver) ServeDNS(w dns.ResponseWriter, r *dns.Msg) {
+	if len(r.Question) == 0 {
+		m.continueToNext(w, r)
+		return
+	}
+
+	question := r.Question[0]
+	question.Name = strings.ToLower(dns.Fqdn(question.Name))
+
+	if question.Qtype != dns.TypeA && question.Qtype != dns.TypeAAAA {
+		m.continueToNext(w, r)
+		return
+	}
+
+	m.mutex.RLock()
+	records, found := m.records[question]
+	m.mutex.RUnlock()
+
+	if !found {
+		m.continueToNext(w, r)
+		return
+	}
+
+	resp := &dns.Msg{}
+	resp.SetReply(r)
+	resp.Authoritative = false
+	resp.RecursionAvailable = true
+
+	resp.Answer = append(resp.Answer, records...)
+
+	log.Debugf("serving %d cached records for domain=%s", len(resp.Answer), question.Name)
+
+	if err := w.WriteMsg(resp); err != nil {
+		log.Errorf("failed to write response: %v", err)
+	}
+}
+
+// MatchSubdomains returns false since this resolver only handles exact domain matches
+// for NetBird infrastructure domains (signal, relay, flow, etc.), not their subdomains.
+func (m *Resolver) MatchSubdomains() bool {
+	return false
+}
+
+// continueToNext signals the handler chain to continue to the next handler.
+func (m *Resolver) continueToNext(w dns.ResponseWriter, r *dns.Msg) {
+	resp := &dns.Msg{}
+	resp.SetRcode(r, dns.RcodeNameError)
+	resp.MsgHdr.Zero = true
+	if err := w.WriteMsg(resp); err != nil {
+		log.Errorf("failed to write continue signal: %v", err)
+	}
+}
+
+// AddDomain manually adds a domain to cache by resolving it.
+func (m *Resolver) AddDomain(ctx context.Context, d domain.Domain) error {
+	dnsName := strings.ToLower(dns.Fqdn(d.PunycodeString()))
+
+	ctx, cancel := context.WithTimeout(ctx, dnsTimeout)
+	defer cancel()
+
+	ips, err := net.DefaultResolver.LookupNetIP(ctx, "ip", d.PunycodeString())
+	if err != nil {
+		return fmt.Errorf("resolve domain %s: %w", d.SafeString(), err)
+	}
+
+	var aRecords, aaaaRecords []dns.RR
+	for _, ip := range ips {
+		if ip.Is4() {
+			rr := &dns.A{
+				Hdr: dns.RR_Header{
+					Name:   dnsName,
+					Rrtype: dns.TypeA,
+					Class:  dns.ClassINET,
+					Ttl:    300,
+				},
+				A: ip.AsSlice(),
+			}
+			aRecords = append(aRecords, rr)
+		} else if ip.Is6() {
+			rr := &dns.AAAA{
+				Hdr: dns.RR_Header{
+					Name:   dnsName,
+					Rrtype: dns.TypeAAAA,
+					Class:  dns.ClassINET,
+					Ttl:    300,
+				},
+				AAAA: ip.AsSlice(),
+			}
+			aaaaRecords = append(aaaaRecords, rr)
+		}
+	}
+
+	m.mutex.Lock()
+
+	if len(aRecords) > 0 {
+		aQuestion := dns.Question{
+			Name:   dnsName,
+			Qtype:  dns.TypeA,
+			Qclass: dns.ClassINET,
+		}
+		m.records[aQuestion] = aRecords
+	}
+
+	if len(aaaaRecords) > 0 {
+		aaaaQuestion := dns.Question{
+			Name:   dnsName,
+			Qtype:  dns.TypeAAAA,
+			Qclass: dns.ClassINET,
+		}
+		m.records[aaaaQuestion] = aaaaRecords
+	}
+
+	m.mutex.Unlock()
+
+	log.Debugf("added domain=%s with %d A records and %d AAAA records",
+		d.SafeString(), len(aRecords), len(aaaaRecords))
+
+	return nil
+}
+
+// PopulateFromConfig extracts and caches domains from the client configuration.
+func (m *Resolver) PopulateFromConfig(ctx context.Context, mgmtURL *url.URL) error {
+	if mgmtURL == nil {
+		return nil
+	}
+
+	d, err := dnsconfig.ExtractValidDomain(mgmtURL.String())
+	if err != nil {
+		return fmt.Errorf("extract domain from URL: %w", err)
+	}
+
+	m.mutex.Lock()
+	m.mgmtDomain = &d
+	m.mutex.Unlock()
+
+	if err := m.AddDomain(ctx, d); err != nil {
+		return fmt.Errorf("add domain: %w", err)
+	}
+
+	return nil
+}
+
+// RemoveDomain removes a domain from the cache.
+func (m *Resolver) RemoveDomain(d domain.Domain) error {
+	dnsName := strings.ToLower(dns.Fqdn(d.PunycodeString()))
+
+	m.mutex.Lock()
+	defer m.mutex.Unlock()
+
+	aQuestion := dns.Question{
+		Name:   dnsName,
+		Qtype:  dns.TypeA,
+		Qclass: dns.ClassINET,
+	}
+	delete(m.records, aQuestion)
+
+	aaaaQuestion := dns.Question{
+		Name:   dnsName,
+		Qtype:  dns.TypeAAAA,
+		Qclass: dns.ClassINET,
+	}
+	delete(m.records, aaaaQuestion)
+
+	log.Debugf("removed domain=%s from cache", d.SafeString())
+	return nil
+}
+
+// GetCachedDomains returns a list of all cached domains.
+func (m *Resolver) GetCachedDomains() domain.List {
+	m.mutex.RLock()
+	defer m.mutex.RUnlock()
+
+	domainSet := make(map[domain.Domain]struct{})
+	for question := range m.records {
+		domainName := strings.TrimSuffix(question.Name, ".")
+		domainSet[domain.Domain(domainName)] = struct{}{}
+	}
+
+	domains := make(domain.List, 0, len(domainSet))
+	for d := range domainSet {
+		domains = append(domains, d)
+	}
+
+	return domains
+}
+
+// UpdateFromServerDomains updates the cache with server domains from network configuration.
+// It merges new domains with existing ones, replacing entire domain types when updated.
+// Empty updates are ignored to prevent clearing infrastructure domains during partial updates.
+func (m *Resolver) UpdateFromServerDomains(ctx context.Context, serverDomains dnsconfig.ServerDomains) (domain.List, error) {
+	newDomains := m.extractDomainsFromServerDomains(serverDomains)
+	var removedDomains domain.List
+
+	if len(newDomains) > 0 {
+		m.mutex.Lock()
+		if m.serverDomains == nil {
+			m.serverDomains = &dnsconfig.ServerDomains{}
+		}
+		updatedServerDomains := m.mergeServerDomains(*m.serverDomains, serverDomains)
+		m.serverDomains = &updatedServerDomains
+		m.mutex.Unlock()
+
+		allDomains := m.extractDomainsFromServerDomains(updatedServerDomains)
+		currentDomains := m.GetCachedDomains()
+		removedDomains = m.removeStaleDomains(currentDomains, allDomains)
+	}
+
+	m.addNewDomains(ctx, newDomains)
+
+	return removedDomains, nil
+}
+
+// removeStaleDomains removes cached domains not present in the target domain list.
+// Management domains are preserved and never removed during server domain updates.
+func (m *Resolver) removeStaleDomains(currentDomains, newDomains domain.List) domain.List {
+	var removedDomains domain.List
+
+	for _, currentDomain := range currentDomains {
+		if m.isDomainInList(currentDomain, newDomains) {
+			continue
+		}
+
+		if m.isManagementDomain(currentDomain) {
+			continue
+		}
+
+		removedDomains = append(removedDomains, currentDomain)
+		if err := m.RemoveDomain(currentDomain); err != nil {
+			log.Warnf("failed to remove domain=%s: %v", currentDomain.SafeString(), err)
+		}
+	}
+
+	return removedDomains
+}
+
+// mergeServerDomains merges new server domains with existing ones.
+// When a domain type is provided in the new domains, it completely replaces that type.
+func (m *Resolver) mergeServerDomains(existing, incoming dnsconfig.ServerDomains) dnsconfig.ServerDomains {
+	merged := existing
+
+	if incoming.Signal != "" {
+		merged.Signal = incoming.Signal
+	}
+	if len(incoming.Relay) > 0 {
+		merged.Relay = incoming.Relay
+	}
+	if incoming.Flow != "" {
+		merged.Flow = incoming.Flow
+	}
+	if len(incoming.Stuns) > 0 {
+		merged.Stuns = incoming.Stuns
+	}
+	if len(incoming.Turns) > 0 {
+		merged.Turns = incoming.Turns
+	}
+
+	return merged
+}
+
+// isDomainInList checks if domain exists in the list
+func (m *Resolver) isDomainInList(domain domain.Domain, list domain.List) bool {
+	for _, d := range list {
+		if domain.SafeString() == d.SafeString() {
+			return true
+		}
+	}
+	return false
+}
+
+// isManagementDomain checks if domain is the protected management domain
+func (m *Resolver) isManagementDomain(domain domain.Domain) bool {
+	m.mutex.RLock()
+	defer m.mutex.RUnlock()
+
+	return m.mgmtDomain != nil && domain == *m.mgmtDomain
+}
+
+// addNewDomains resolves and caches all domains from the update
+func (m *Resolver) addNewDomains(ctx context.Context, newDomains domain.List) {
+	for _, newDomain := range newDomains {
+		if err := m.AddDomain(ctx, newDomain); err != nil {
+			log.Warnf("failed to add/update domain=%s: %v", newDomain.SafeString(), err)
+		} else {
+			log.Debugf("added/updated management cache domain=%s", newDomain.SafeString())
+		}
+	}
+}
+
+func (m *Resolver) extractDomainsFromServerDomains(serverDomains dnsconfig.ServerDomains) domain.List {
+	var domains domain.List
+
+	if serverDomains.Signal != "" {
+		domains = append(domains, serverDomains.Signal)
+	}
+
+	for _, relay := range serverDomains.Relay {
+		if relay != "" {
+			domains = append(domains, relay)
+		}
+	}
+
+	if serverDomains.Flow != "" {
+		domains = append(domains, serverDomains.Flow)
+	}
+
+	for _, stun := range serverDomains.Stuns {
+		if stun != "" {
+			domains = append(domains, stun)
+		}
+	}
+
+	for _, turn := range serverDomains.Turns {
+		if turn != "" {
+			domains = append(domains, turn)
+		}
+	}
+
+	return domains
+}
diff --git a/client/internal/dns/mgmt/mgmt_test.go b/client/internal/dns/mgmt/mgmt_test.go
new file mode 100644
index 000000000..99d289871
--- /dev/null
+++ b/client/internal/dns/mgmt/mgmt_test.go
@@ -0,0 +1,416 @@
+package mgmt
+
+import (
+	"context"
+	"fmt"
+	"net/url"
+	"strings"
+	"testing"
+
+	"github.com/miekg/dns"
+	"github.com/stretchr/testify/assert"
+
+	dnsconfig "github.com/netbirdio/netbird/client/internal/dns/config"
+	"github.com/netbirdio/netbird/client/internal/dns/test"
+	"github.com/netbirdio/netbird/shared/management/domain"
+)
+
+func TestResolver_NewResolver(t *testing.T) {
+	resolver := NewResolver()
+
+	assert.NotNil(t, resolver)
+	assert.NotNil(t, resolver.records)
+	assert.False(t, resolver.MatchSubdomains())
+}
+
+func TestResolver_ExtractDomainFromURL(t *testing.T) {
+	tests := []struct {
+		name        string
+		urlStr      string
+		expectedDom string
+		expectError bool
+	}{
+		{
+			name:        "HTTPS URL with port",
+			urlStr:      "https://api.netbird.io:443",
+			expectedDom: "api.netbird.io",
+			expectError: false,
+		},
+		{
+			name:        "HTTP URL without port",
+			urlStr:      "http://signal.example.com",
+			expectedDom: "signal.example.com",
+			expectError: false,
+		},
+		{
+			name:        "URL with path",
+			urlStr:      "https://relay.netbird.io/status",
+			expectedDom: "relay.netbird.io",
+			expectError: false,
+		},
+		{
+			name:        "Invalid URL",
+			urlStr:      "not-a-valid-url",
+			expectedDom: "not-a-valid-url",
+			expectError: false,
+		},
+		{
+			name:        "Empty URL",
+			urlStr:      "",
+			expectedDom: "",
+			expectError: true,
+		},
+		{
+			name:        "STUN URL",
+			urlStr:      "stun:stun.example.com:3478",
+			expectedDom: "stun.example.com",
+			expectError: false,
+		},
+		{
+			name:        "TURN URL",
+			urlStr:      "turn:turn.example.com:3478",
+			expectedDom: "turn.example.com",
+			expectError: false,
+		},
+		{
+			name:        "REL URL",
+			urlStr:      "rel://relay.example.com:443",
+			expectedDom: "relay.example.com",
+			expectError: false,
+		},
+		{
+			name:        "RELS URL",
+			urlStr:      "rels://relay.example.com:443",
+			expectedDom: "relay.example.com",
+			expectError: false,
+		},
+	}
+
+	for _, tt := range tests {
+		t.Run(tt.name, func(t *testing.T) {
+			var parsedURL *url.URL
+			var err error
+
+			if tt.urlStr != "" {
+				parsedURL, err = url.Parse(tt.urlStr)
+				if err != nil && !tt.expectError {
+					t.Fatalf("Failed to parse URL: %v", err)
+				}
+			}
+
+			domain, err := extractDomainFromURL(parsedURL)
+
+			if tt.expectError {
+				assert.Error(t, err)
+			} else {
+				assert.NoError(t, err)
+				assert.Equal(t, tt.expectedDom, domain.SafeString())
+			}
+		})
+	}
+}
+
+func TestResolver_PopulateFromConfig(t *testing.T) {
+	ctx, cancel := context.WithCancel(context.Background())
+	defer cancel()
+
+	resolver := NewResolver()
+
+	// Test with IP address - should return error since IP addresses are rejected
+	mgmtURL, _ := url.Parse("https://127.0.0.1")
+
+	err := resolver.PopulateFromConfig(ctx, mgmtURL)
+	assert.Error(t, err)
+	assert.ErrorIs(t, err, dnsconfig.ErrIPNotAllowed)
+
+	// No domains should be cached when using IP addresses
+	domains := resolver.GetCachedDomains()
+	assert.Equal(t, 0, len(domains), "No domains should be cached when using IP addresses")
+}
+
+func TestResolver_ServeDNS(t *testing.T) {
+	resolver := NewResolver()
+	ctx := context.Background()
+
+	// Add a test domain to the cache - use example.org which is reserved for testing
+	testDomain, err := domain.FromString("example.org")
+	if err != nil {
+		t.Fatalf("Failed to create domain: %v", err)
+	}
+	err = resolver.AddDomain(ctx, testDomain)
+	if err != nil {
+		t.Skipf("Skipping test due to DNS resolution failure: %v", err)
+	}
+
+	// Test A record query for cached domain
+	t.Run("Cached domain A record", func(t *testing.T) {
+		var capturedMsg *dns.Msg
+		mockWriter := &test.MockResponseWriter{
+			WriteMsgFunc: func(m *dns.Msg) error {
+				capturedMsg = m
+				return nil
+			},
+		}
+
+		req := new(dns.Msg)
+		req.SetQuestion("example.org.", dns.TypeA)
+
+		resolver.ServeDNS(mockWriter, req)
+
+		assert.NotNil(t, capturedMsg)
+		assert.Equal(t, dns.RcodeSuccess, capturedMsg.Rcode)
+		assert.True(t, len(capturedMsg.Answer) > 0, "Should have at least one answer")
+	})
+
+	// Test uncached domain signals to continue to next handler
+	t.Run("Uncached domain signals continue to next handler", func(t *testing.T) {
+		var capturedMsg *dns.Msg
+		mockWriter := &test.MockResponseWriter{
+			WriteMsgFunc: func(m *dns.Msg) error {
+				capturedMsg = m
+				return nil
+			},
+		}
+
+		req := new(dns.Msg)
+		req.SetQuestion("unknown.example.com.", dns.TypeA)
+
+		resolver.ServeDNS(mockWriter, req)
+
+		assert.NotNil(t, capturedMsg)
+		assert.Equal(t, dns.RcodeNameError, capturedMsg.Rcode)
+		// Zero flag set to true signals the handler chain to continue to next handler
+		assert.True(t, capturedMsg.MsgHdr.Zero, "Zero flag should be set to signal continuation to next handler")
+		assert.Empty(t, capturedMsg.Answer, "Should have no answers for uncached domain")
+	})
+
+	// Test that subdomains of cached domains are NOT resolved
+	t.Run("Subdomains of cached domains are not resolved", func(t *testing.T) {
+		var capturedMsg *dns.Msg
+		mockWriter := &test.MockResponseWriter{
+			WriteMsgFunc: func(m *dns.Msg) error {
+				capturedMsg = m
+				return nil
+			},
+		}
+
+		// Query for a subdomain of our cached domain
+		req := new(dns.Msg)
+		req.SetQuestion("sub.example.org.", dns.TypeA)
+
+		resolver.ServeDNS(mockWriter, req)
+
+		assert.NotNil(t, capturedMsg)
+		assert.Equal(t, dns.RcodeNameError, capturedMsg.Rcode)
+		assert.True(t, capturedMsg.MsgHdr.Zero, "Should signal continuation to next handler for subdomains")
+		assert.Empty(t, capturedMsg.Answer, "Should have no answers for subdomains")
+	})
+
+	// Test case-insensitive matching
+	t.Run("Case-insensitive domain matching", func(t *testing.T) {
+		var capturedMsg *dns.Msg
+		mockWriter := &test.MockResponseWriter{
+			WriteMsgFunc: func(m *dns.Msg) error {
+				capturedMsg = m
+				return nil
+			},
+		}
+
+		// Query with different casing
+		req := new(dns.Msg)
+		req.SetQuestion("EXAMPLE.ORG.", dns.TypeA)
+
+		resolver.ServeDNS(mockWriter, req)
+
+		assert.NotNil(t, capturedMsg)
+		assert.Equal(t, dns.RcodeSuccess, capturedMsg.Rcode)
+		assert.True(t, len(capturedMsg.Answer) > 0, "Should resolve regardless of case")
+	})
+}
+
+func TestResolver_GetCachedDomains(t *testing.T) {
+	resolver := NewResolver()
+	ctx := context.Background()
+
+	testDomain, err := domain.FromString("example.org")
+	if err != nil {
+		t.Fatalf("Failed to create domain: %v", err)
+	}
+	err = resolver.AddDomain(ctx, testDomain)
+	if err != nil {
+		t.Skipf("Skipping test due to DNS resolution failure: %v", err)
+	}
+
+	cachedDomains := resolver.GetCachedDomains()
+
+	assert.Equal(t, 1, len(cachedDomains), "Should return exactly one domain for single added domain")
+	assert.Equal(t, testDomain.SafeString(), cachedDomains[0].SafeString(), "Cached domain should match original")
+	assert.False(t, strings.HasSuffix(cachedDomains[0].PunycodeString(), "."), "Domain should not have trailing dot")
+}
+
+func TestResolver_ManagementDomainProtection(t *testing.T) {
+	resolver := NewResolver()
+	ctx := context.Background()
+
+	mgmtURL, _ := url.Parse("https://example.org")
+	err := resolver.PopulateFromConfig(ctx, mgmtURL)
+	if err != nil {
+		t.Skipf("Skipping test due to DNS resolution failure: %v", err)
+	}
+
+	initialDomains := resolver.GetCachedDomains()
+	if len(initialDomains) == 0 {
+		t.Skip("Management domain failed to resolve, skipping test")
+	}
+	assert.Equal(t, 1, len(initialDomains), "Should have management domain cached")
+	assert.Equal(t, "example.org", initialDomains[0].SafeString())
+
+	serverDomains := dnsconfig.ServerDomains{
+		Signal: "google.com",
+		Relay:  []domain.Domain{"cloudflare.com"},
+	}
+
+	_, err = resolver.UpdateFromServerDomains(ctx, serverDomains)
+	if err != nil {
+		t.Logf("Server domains update failed: %v", err)
+	}
+
+	finalDomains := resolver.GetCachedDomains()
+
+	managementStillCached := false
+	for _, d := range finalDomains {
+		if d.SafeString() == "example.org" {
+			managementStillCached = true
+			break
+		}
+	}
+	assert.True(t, managementStillCached, "Management domain should never be removed")
+}
+
+// extractDomainFromURL extracts a domain from a URL - test helper function
+func extractDomainFromURL(u *url.URL) (domain.Domain, error) {
+	if u == nil {
+		return "", fmt.Errorf("URL is nil")
+	}
+	return dnsconfig.ExtractValidDomain(u.String())
+}
+
+func TestResolver_EmptyUpdateDoesNotRemoveDomains(t *testing.T) {
+	resolver := NewResolver()
+	ctx := context.Background()
+
+	// Set up initial domains using resolvable domains
+	initialDomains := dnsconfig.ServerDomains{
+		Signal: "example.org",
+		Stuns:  []domain.Domain{"google.com"},
+		Turns:  []domain.Domain{"cloudflare.com"},
+	}
+
+	// Add initial domains
+	_, err := resolver.UpdateFromServerDomains(ctx, initialDomains)
+	if err != nil {
+		t.Skipf("Skipping test due to DNS resolution failure: %v", err)
+	}
+
+	// Verify domains were added
+	cachedDomains := resolver.GetCachedDomains()
+	assert.Len(t, cachedDomains, 3)
+
+	// Update with empty ServerDomains (simulating partial network map update)
+	emptyDomains := dnsconfig.ServerDomains{}
+	removedDomains, err := resolver.UpdateFromServerDomains(ctx, emptyDomains)
+	assert.NoError(t, err)
+
+	// Verify no domains were removed
+	assert.Len(t, removedDomains, 0, "No domains should be removed when update is empty")
+
+	// Verify all original domains are still cached
+	finalDomains := resolver.GetCachedDomains()
+	assert.Len(t, finalDomains, 3, "All original domains should still be cached")
+}
+
+func TestResolver_PartialUpdateReplacesOnlyUpdatedTypes(t *testing.T) {
+	resolver := NewResolver()
+	ctx := context.Background()
+
+	// Set up initial complete domains using resolvable domains
+	initialDomains := dnsconfig.ServerDomains{
+		Signal: "example.org",
+		Stuns:  []domain.Domain{"google.com"},
+		Turns:  []domain.Domain{"cloudflare.com"},
+	}
+
+	// Add initial domains
+	_, err := resolver.UpdateFromServerDomains(ctx, initialDomains)
+	if err != nil {
+		t.Skipf("Skipping test due to DNS resolution failure: %v", err)
+	}
+	assert.Len(t, resolver.GetCachedDomains(), 3)
+
+	// Update with partial ServerDomains (only signal domain - this should replace signal but preserve stun/turn)
+	partialDomains := dnsconfig.ServerDomains{
+		Signal: "github.com",
+	}
+	removedDomains, err := resolver.UpdateFromServerDomains(ctx, partialDomains)
+	if err != nil {
+		t.Skipf("Skipping test due to DNS resolution failure: %v", err)
+	}
+
+	// Should remove only the old signal domain
+	assert.Len(t, removedDomains, 1, "Should remove only the old signal domain")
+	assert.Equal(t, "example.org", removedDomains[0].SafeString())
+
+	finalDomains := resolver.GetCachedDomains()
+	assert.Len(t, finalDomains, 3, "Should have new signal plus preserved stun/turn domains")
+
+	domainStrings := make([]string, len(finalDomains))
+	for i, d := range finalDomains {
+		domainStrings[i] = d.SafeString()
+	}
+	assert.Contains(t, domainStrings, "github.com")
+	assert.Contains(t, domainStrings, "google.com")
+	assert.Contains(t, domainStrings, "cloudflare.com")
+	assert.NotContains(t, domainStrings, "example.org")
+}
+
+func TestResolver_PartialUpdateAddsNewTypePreservesExisting(t *testing.T) {
+	resolver := NewResolver()
+	ctx := context.Background()
+
+	// Set up initial complete domains using resolvable domains
+	initialDomains := dnsconfig.ServerDomains{
+		Signal: "example.org",
+		Stuns:  []domain.Domain{"google.com"},
+		Turns:  []domain.Domain{"cloudflare.com"},
+	}
+
+	// Add initial domains
+	_, err := resolver.UpdateFromServerDomains(ctx, initialDomains)
+	if err != nil {
+		t.Skipf("Skipping test due to DNS resolution failure: %v", err)
+	}
+	assert.Len(t, resolver.GetCachedDomains(), 3)
+
+	// Update with partial ServerDomains (only flow domain - new type, should preserve all existing)
+	partialDomains := dnsconfig.ServerDomains{
+		Flow: "github.com",
+	}
+	removedDomains, err := resolver.UpdateFromServerDomains(ctx, partialDomains)
+	if err != nil {
+		t.Skipf("Skipping test due to DNS resolution failure: %v", err)
+	}
+
+	assert.Len(t, removedDomains, 0, "Should not remove any domains when adding new type")
+
+	finalDomains := resolver.GetCachedDomains()
+	assert.Len(t, finalDomains, 4, "Should have all original domains plus new flow domain")
+
+	domainStrings := make([]string, len(finalDomains))
+	for i, d := range finalDomains {
+		domainStrings[i] = d.SafeString()
+	}
+	assert.Contains(t, domainStrings, "example.org")
+	assert.Contains(t, domainStrings, "google.com")
+	assert.Contains(t, domainStrings, "cloudflare.com")
+	assert.Contains(t, domainStrings, "github.com")
+}
diff --git a/client/internal/dns/mock_server.go b/client/internal/dns/mock_server.go
index d160fa99a..0f89b9016 100644
--- a/client/internal/dns/mock_server.go
+++ b/client/internal/dns/mock_server.go
@@ -3,20 +3,23 @@ package dns
 import (
 	"fmt"
 	"net/netip"
+	"net/url"
 
 	"github.com/miekg/dns"
 
+	dnsconfig "github.com/netbirdio/netbird/client/internal/dns/config"
 	nbdns "github.com/netbirdio/netbird/dns"
 	"github.com/netbirdio/netbird/shared/management/domain"
 )
 
 // MockServer is the mock instance of a dns server
 type MockServer struct {
-	InitializeFunc        func() error
-	StopFunc              func()
-	UpdateDNSServerFunc   func(serial uint64, update nbdns.Config) error
-	RegisterHandlerFunc   func(domain.List, dns.Handler, int)
-	DeregisterHandlerFunc func(domain.List, int)
+	InitializeFunc         func() error
+	StopFunc               func()
+	UpdateDNSServerFunc    func(serial uint64, update nbdns.Config) error
+	RegisterHandlerFunc    func(domain.List, dns.Handler, int)
+	DeregisterHandlerFunc  func(domain.List, int)
+	UpdateServerConfigFunc func(domains dnsconfig.ServerDomains) error
 }
 
 func (m *MockServer) RegisterHandler(domains domain.List, handler dns.Handler, priority int) {
@@ -70,3 +73,14 @@ func (m *MockServer) SearchDomains() []string {
 // ProbeAvailability mocks implementation of ProbeAvailability from the Server interface
 func (m *MockServer) ProbeAvailability() {
 }
+
+func (m *MockServer) UpdateServerConfig(domains dnsconfig.ServerDomains) error {
+	if m.UpdateServerConfigFunc != nil {
+		return m.UpdateServerConfigFunc(domains)
+	}
+	return nil
+}
+
+func (m *MockServer) PopulateManagementDomain(mgmtURL *url.URL) error {
+	return nil
+}
diff --git a/client/internal/dns/server.go b/client/internal/dns/server.go
index cbcf6a256..8cb886203 100644
--- a/client/internal/dns/server.go
+++ b/client/internal/dns/server.go
@@ -5,6 +5,7 @@ import (
 	"errors"
 	"fmt"
 	"net/netip"
+	"net/url"
 	"runtime"
 	"strings"
 	"sync"
@@ -15,7 +16,9 @@ import (
 	"golang.org/x/exp/maps"
 
 	"github.com/netbirdio/netbird/client/iface/netstack"
+	dnsconfig "github.com/netbirdio/netbird/client/internal/dns/config"
 	"github.com/netbirdio/netbird/client/internal/dns/local"
+	"github.com/netbirdio/netbird/client/internal/dns/mgmt"
 	"github.com/netbirdio/netbird/client/internal/dns/types"
 	"github.com/netbirdio/netbird/client/internal/listener"
 	"github.com/netbirdio/netbird/client/internal/peer"
@@ -45,6 +48,8 @@ type Server interface {
 	OnUpdatedHostDNSServer(addrs []netip.AddrPort)
 	SearchDomains() []string
 	ProbeAvailability()
+	UpdateServerConfig(domains dnsconfig.ServerDomains) error
+	PopulateManagementDomain(mgmtURL *url.URL) error
 }
 
 type nsGroupsByDomain struct {
@@ -77,6 +82,8 @@ type DefaultServer struct {
 	handlerChain       *HandlerChain
 	extraDomains       map[domain.Domain]int
 
+	mgmtCacheResolver *mgmt.Resolver
+
 	// permanent related properties
 	permanent      bool
 	hostsDNSHolder *hostsDNSHolder
@@ -104,18 +111,20 @@ type handlerWrapper struct {
 
 type registeredHandlerMap map[types.HandlerID]handlerWrapper
 
+// DefaultServerConfig holds configuration parameters for NewDefaultServer
+type DefaultServerConfig struct {
+	WgInterface    WGIface
+	CustomAddress  string
+	StatusRecorder *peer.Status
+	StateManager   *statemanager.Manager
+	DisableSys     bool
+}
+
 // NewDefaultServer returns a new dns server
-func NewDefaultServer(
-	ctx context.Context,
-	wgInterface WGIface,
-	customAddress string,
-	statusRecorder *peer.Status,
-	stateManager *statemanager.Manager,
-	disableSys bool,
-) (*DefaultServer, error) {
+func NewDefaultServer(ctx context.Context, config DefaultServerConfig) (*DefaultServer, error) {
 	var addrPort *netip.AddrPort
-	if customAddress != "" {
-		parsedAddrPort, err := netip.ParseAddrPort(customAddress)
+	if config.CustomAddress != "" {
+		parsedAddrPort, err := netip.ParseAddrPort(config.CustomAddress)
 		if err != nil {
 			return nil, fmt.Errorf("unable to parse the custom dns address, got error: %s", err)
 		}
@@ -123,13 +132,14 @@ func NewDefaultServer(
 	}
 
 	var dnsService service
-	if wgInterface.IsUserspaceBind() {
-		dnsService = NewServiceViaMemory(wgInterface)
+	if config.WgInterface.IsUserspaceBind() {
+		dnsService = NewServiceViaMemory(config.WgInterface)
 	} else {
-		dnsService = newServiceViaListener(wgInterface, addrPort)
+		dnsService = newServiceViaListener(config.WgInterface, addrPort)
 	}
 
-	return newDefaultServer(ctx, wgInterface, dnsService, statusRecorder, stateManager, disableSys), nil
+	server := newDefaultServer(ctx, config.WgInterface, dnsService, config.StatusRecorder, config.StateManager, config.DisableSys)
+	return server, nil
 }
 
 // NewDefaultServerPermanentUpstream returns a new dns server. It optimized for mobile systems
@@ -178,20 +188,24 @@ func newDefaultServer(
 ) *DefaultServer {
 	handlerChain := NewHandlerChain()
 	ctx, stop := context.WithCancel(ctx)
+
+	mgmtCacheResolver := mgmt.NewResolver()
+
 	defaultServer := &DefaultServer{
-		ctx:            ctx,
-		ctxCancel:      stop,
-		disableSys:     disableSys,
-		service:        dnsService,
-		handlerChain:   handlerChain,
-		extraDomains:   make(map[domain.Domain]int),
-		dnsMuxMap:      make(registeredHandlerMap),
-		localResolver:  local.NewResolver(),
-		wgInterface:    wgInterface,
-		statusRecorder: statusRecorder,
-		stateManager:   stateManager,
-		hostsDNSHolder: newHostsDNSHolder(),
-		hostManager:    &noopHostConfigurator{},
+		ctx:               ctx,
+		ctxCancel:         stop,
+		disableSys:        disableSys,
+		service:           dnsService,
+		handlerChain:      handlerChain,
+		extraDomains:      make(map[domain.Domain]int),
+		dnsMuxMap:         make(registeredHandlerMap),
+		localResolver:     local.NewResolver(),
+		wgInterface:       wgInterface,
+		statusRecorder:    statusRecorder,
+		stateManager:      stateManager,
+		hostsDNSHolder:    newHostsDNSHolder(),
+		hostManager:       &noopHostConfigurator{},
+		mgmtCacheResolver: mgmtCacheResolver,
 	}
 
 	// register with root zone, handler chain takes care of the routing
@@ -217,7 +231,7 @@ func (s *DefaultServer) RegisterHandler(domains domain.List, handler dns.Handler
 }
 
 func (s *DefaultServer) registerHandler(domains []string, handler dns.Handler, priority int) {
-	log.Debugf("registering handler %s with priority %d", handler, priority)
+	log.Debugf("registering handler %s with priority %d for %v", handler, priority, domains)
 
 	for _, domain := range domains {
 		if domain == "" {
@@ -246,7 +260,7 @@ func (s *DefaultServer) DeregisterHandler(domains domain.List, priority int) {
 }
 
 func (s *DefaultServer) deregisterHandler(domains []string, priority int) {
-	log.Debugf("deregistering handler %v with priority %d", domains, priority)
+	log.Debugf("deregistering handler with priority %d for %v", priority, domains)
 
 	for _, domain := range domains {
 		if domain == "" {
@@ -432,6 +446,29 @@ func (s *DefaultServer) ProbeAvailability() {
 	wg.Wait()
 }
 
+func (s *DefaultServer) UpdateServerConfig(domains dnsconfig.ServerDomains) error {
+	s.mux.Lock()
+	defer s.mux.Unlock()
+
+	if s.mgmtCacheResolver != nil {
+		removedDomains, err := s.mgmtCacheResolver.UpdateFromServerDomains(s.ctx, domains)
+		if err != nil {
+			return fmt.Errorf("update management cache resolver: %w", err)
+		}
+
+		if len(removedDomains) > 0 {
+			s.deregisterHandler(removedDomains.ToPunycodeList(), PriorityMgmtCache)
+		}
+
+		newDomains := s.mgmtCacheResolver.GetCachedDomains()
+		if len(newDomains) > 0 {
+			s.registerHandler(newDomains.ToPunycodeList(), s.mgmtCacheResolver, PriorityMgmtCache)
+		}
+	}
+
+	return nil
+}
+
 func (s *DefaultServer) applyConfiguration(update nbdns.Config) error {
 	// is the service should be Disabled, we stop the listener or fake resolver
 	if update.ServiceEnable {
@@ -961,3 +998,11 @@ func toZone(d domain.Domain) domain.Domain {
 		),
 	)
 }
+
+// PopulateManagementDomain populates the DNS cache with management domain
+func (s *DefaultServer) PopulateManagementDomain(mgmtURL *url.URL) error {
+	if s.mgmtCacheResolver != nil {
+		return s.mgmtCacheResolver.PopulateFromConfig(s.ctx, mgmtURL)
+	}
+	return nil
+}
diff --git a/client/internal/dns/server_test.go b/client/internal/dns/server_test.go
index 068f001d8..11575d500 100644
--- a/client/internal/dns/server_test.go
+++ b/client/internal/dns/server_test.go
@@ -363,7 +363,13 @@ func TestUpdateDNSServer(t *testing.T) {
 					t.Log(err)
 				}
 			}()
-			dnsServer, err := NewDefaultServer(context.Background(), wgIface, "", peer.NewRecorder("mgm"), nil, false)
+			dnsServer, err := NewDefaultServer(context.Background(), DefaultServerConfig{
+				WgInterface:    wgIface,
+				CustomAddress:  "",
+				StatusRecorder: peer.NewRecorder("mgm"),
+				StateManager:   nil,
+				DisableSys:     false,
+			})
 			if err != nil {
 				t.Fatal(err)
 			}
@@ -473,7 +479,13 @@ func TestDNSFakeResolverHandleUpdates(t *testing.T) {
 		return
 	}
 
-	dnsServer, err := NewDefaultServer(context.Background(), wgIface, "", peer.NewRecorder("mgm"), nil, false)
+	dnsServer, err := NewDefaultServer(context.Background(), DefaultServerConfig{
+		WgInterface:    wgIface,
+		CustomAddress:  "",
+		StatusRecorder: peer.NewRecorder("mgm"),
+		StateManager:   nil,
+		DisableSys:     false,
+	})
 	if err != nil {
 		t.Errorf("create DNS server: %v", err)
 		return
@@ -575,7 +587,13 @@ func TestDNSServerStartStop(t *testing.T) {
 
 	for _, testCase := range testCases {
 		t.Run(testCase.name, func(t *testing.T) {
-			dnsServer, err := NewDefaultServer(context.Background(), &mocWGIface{}, testCase.addrPort, peer.NewRecorder("mgm"), nil, false)
+			dnsServer, err := NewDefaultServer(context.Background(), DefaultServerConfig{
+				WgInterface:    &mocWGIface{},
+				CustomAddress:  testCase.addrPort,
+				StatusRecorder: peer.NewRecorder("mgm"),
+				StateManager:   nil,
+				DisableSys:     false,
+			})
 			if err != nil {
 				t.Fatalf("%v", err)
 			}
diff --git a/client/internal/dns/upstream.go b/client/internal/dns/upstream.go
index 071e3617a..c19e0acb5 100644
--- a/client/internal/dns/upstream.go
+++ b/client/internal/dns/upstream.go
@@ -33,9 +33,11 @@ func SetCurrentMTU(mtu uint16) {
 }
 
 const (
-	UpstreamTimeout = 15 * time.Second
+	UpstreamTimeout = 4 * time.Second
+	// ClientTimeout is the timeout for the dns.Client.
+	// Set longer than UpstreamTimeout to ensure context timeout takes precedence
+	ClientTimeout = 5 * time.Second
 
-	failsTillDeact   = int32(5)
 	reactivatePeriod = 30 * time.Second
 	probeTimeout     = 2 * time.Second
 )
@@ -58,9 +60,7 @@ type upstreamResolverBase struct {
 	upstreamServers  []netip.AddrPort
 	domain           string
 	disabled         bool
-	failsCount       atomic.Int32
 	successCount     atomic.Int32
-	failsTillDeact   int32
 	mutex            sync.Mutex
 	reactivatePeriod time.Duration
 	upstreamTimeout  time.Duration
@@ -79,14 +79,13 @@ func newUpstreamResolverBase(ctx context.Context, statusRecorder *peer.Status, d
 		domain:           domain,
 		upstreamTimeout:  UpstreamTimeout,
 		reactivatePeriod: reactivatePeriod,
-		failsTillDeact:   failsTillDeact,
 		statusRecorder:   statusRecorder,
 	}
 }
 
 // String returns a string representation of the upstream resolver
 func (u *upstreamResolverBase) String() string {
-	return fmt.Sprintf("upstream %s", u.upstreamServers)
+	return fmt.Sprintf("Upstream %s", u.upstreamServers)
 }
 
 // ID returns the unique handler ID
@@ -116,58 +115,102 @@ func (u *upstreamResolverBase) Stop() {
 func (u *upstreamResolverBase) ServeDNS(w dns.ResponseWriter, r *dns.Msg) {
 	requestID := GenerateRequestID()
 	logger := log.WithField("request_id", requestID)
-	var err error
-	defer func() {
-		u.checkUpstreamFails(err)
-	}()
 
 	logger.Tracef("received upstream question: domain=%s type=%v class=%v", r.Question[0].Name, r.Question[0].Qtype, r.Question[0].Qclass)
+
+	u.prepareRequest(r)
+
+	if u.ctx.Err() != nil {
+		logger.Tracef("%s has been stopped", u)
+		return
+	}
+
+	if u.tryUpstreamServers(w, r, logger) {
+		return
+	}
+
+	u.writeErrorResponse(w, r, logger)
+}
+
+func (u *upstreamResolverBase) prepareRequest(r *dns.Msg) {
 	if r.Extra == nil {
 		r.MsgHdr.AuthenticatedData = true
 	}
+}
 
-	select {
-	case <-u.ctx.Done():
-		logger.Tracef("%s has been stopped", u)
-		return
-	default:
+func (u *upstreamResolverBase) tryUpstreamServers(w dns.ResponseWriter, r *dns.Msg, logger *log.Entry) bool {
+	timeout := u.upstreamTimeout
+	if len(u.upstreamServers) > 1 {
+		maxTotal := 5 * time.Second
+		minPerUpstream := 2 * time.Second
+		scaledTimeout := maxTotal / time.Duration(len(u.upstreamServers))
+		if scaledTimeout > minPerUpstream {
+			timeout = scaledTimeout
+		} else {
+			timeout = minPerUpstream
+		}
 	}
 
 	for _, upstream := range u.upstreamServers {
-		var rm *dns.Msg
-		var t time.Duration
-
-		func() {
-			ctx, cancel := context.WithTimeout(u.ctx, u.upstreamTimeout)
-			defer cancel()
-			rm, t, err = u.upstreamClient.exchange(ctx, upstream.String(), r)
-		}()
-
-		if err != nil {
-			if errors.Is(err, context.DeadlineExceeded) || isTimeout(err) {
-				logger.Warnf("upstream %s timed out for question domain=%s", upstream, r.Question[0].Name)
-				continue
-			}
-			logger.Warnf("failed to query upstream %s for question domain=%s: %s", upstream, r.Question[0].Name, err)
-			continue
+		if u.queryUpstream(w, r, upstream, timeout, logger) {
+			return true
 		}
+	}
+	return false
+}
 
-		if rm == nil || !rm.Response {
-			logger.Warnf("no response from upstream %s for question domain=%s", upstream, r.Question[0].Name)
-			continue
-		}
+func (u *upstreamResolverBase) queryUpstream(w dns.ResponseWriter, r *dns.Msg, upstream netip.AddrPort, timeout time.Duration, logger *log.Entry) bool {
+	var rm *dns.Msg
+	var t time.Duration
+	var err error
 
-		u.successCount.Add(1)
-		logger.Tracef("took %s to query the upstream %s for question domain=%s", t, upstream, r.Question[0].Name)
+	var startTime time.Time
+	func() {
+		ctx, cancel := context.WithTimeout(u.ctx, timeout)
+		defer cancel()
+		startTime = time.Now()
+		rm, t, err = u.upstreamClient.exchange(ctx, upstream.String(), r)
+	}()
 
-		if err = w.WriteMsg(rm); err != nil {
-			logger.Errorf("failed to write DNS response for question domain=%s: %s", r.Question[0].Name, err)
-		}
-		// count the fails only if they happen sequentially
-		u.failsCount.Store(0)
+	if err != nil {
+		u.handleUpstreamError(err, upstream, r.Question[0].Name, startTime, timeout, logger)
+		return false
+	}
+
+	if rm == nil || !rm.Response {
+		logger.Warnf("no response from upstream %s for question domain=%s", upstream, r.Question[0].Name)
+		return false
+	}
+
+	return u.writeSuccessResponse(w, rm, upstream, r.Question[0].Name, t, logger)
+}
+
+func (u *upstreamResolverBase) handleUpstreamError(err error, upstream netip.AddrPort, domain string, startTime time.Time, timeout time.Duration, logger *log.Entry) {
+	if !errors.Is(err, context.DeadlineExceeded) && !isTimeout(err) {
+		logger.Warnf("failed to query upstream %s for question domain=%s: %s", upstream, domain, err)
 		return
 	}
-	u.failsCount.Add(1)
+
+	elapsed := time.Since(startTime)
+	timeoutMsg := fmt.Sprintf("upstream %s timed out for question domain=%s after %v (timeout=%v)", upstream, domain, elapsed.Truncate(time.Millisecond), timeout)
+	if peerInfo := u.debugUpstreamTimeout(upstream); peerInfo != "" {
+		timeoutMsg += " " + peerInfo
+	}
+	timeoutMsg += fmt.Sprintf(" - error: %v", err)
+	logger.Warnf(timeoutMsg)
+}
+
+func (u *upstreamResolverBase) writeSuccessResponse(w dns.ResponseWriter, rm *dns.Msg, upstream netip.AddrPort, domain string, t time.Duration, logger *log.Entry) bool {
+	u.successCount.Add(1)
+	logger.Tracef("took %s to query the upstream %s for question domain=%s", t, upstream, domain)
+
+	if err := w.WriteMsg(rm); err != nil {
+		logger.Errorf("failed to write DNS response for question domain=%s: %s", domain, err)
+	}
+	return true
+}
+
+func (u *upstreamResolverBase) writeErrorResponse(w dns.ResponseWriter, r *dns.Msg, logger *log.Entry) {
 	logger.Errorf("all queries to the %s failed for question domain=%s", u, r.Question[0].Name)
 
 	m := new(dns.Msg)
@@ -177,41 +220,6 @@ func (u *upstreamResolverBase) ServeDNS(w dns.ResponseWriter, r *dns.Msg) {
 	}
 }
 
-// checkUpstreamFails counts fails and disables or enables upstream resolving
-//
-// If fails count is greater that failsTillDeact, upstream resolving
-// will be disabled for reactivatePeriod, after that time period fails counter
-// will be reset and upstream will be reactivated.
-func (u *upstreamResolverBase) checkUpstreamFails(err error) {
-	u.mutex.Lock()
-	defer u.mutex.Unlock()
-
-	if u.failsCount.Load() < u.failsTillDeact || u.disabled {
-		return
-	}
-
-	select {
-	case <-u.ctx.Done():
-		return
-	default:
-	}
-
-	u.disable(err)
-
-	if u.statusRecorder == nil {
-		return
-	}
-
-	u.statusRecorder.PublishEvent(
-		proto.SystemEvent_WARNING,
-		proto.SystemEvent_DNS,
-		"All upstream servers failed (fail count exceeded)",
-		"Unable to reach one or more DNS servers. This might affect your ability to connect to some services.",
-		map[string]string{"upstreams": u.upstreamServersString()},
-		// TODO add domain meta
-	)
-}
-
 // ProbeAvailability tests all upstream servers simultaneously and
 // disables the resolver if none work
 func (u *upstreamResolverBase) ProbeAvailability() {
@@ -224,8 +232,8 @@ func (u *upstreamResolverBase) ProbeAvailability() {
 	default:
 	}
 
-	// avoid probe if upstreams could resolve at least one query and fails count is less than failsTillDeact
-	if u.successCount.Load() > 0 && u.failsCount.Load() < u.failsTillDeact {
+	// avoid probe if upstreams could resolve at least one query
+	if u.successCount.Load() > 0 {
 		return
 	}
 
@@ -312,7 +320,6 @@ func (u *upstreamResolverBase) waitUntilResponse() {
 	}
 
 	log.Infof("upstreams %s are responsive again. Adding them back to system", u.upstreamServersString())
-	u.failsCount.Store(0)
 	u.successCount.Add(1)
 	u.reactivate()
 	u.disabled = false
@@ -416,3 +423,80 @@ func GenerateRequestID() string {
 	}
 	return hex.EncodeToString(bytes)
 }
+
+// FormatPeerStatus formats peer connection status information for debugging DNS timeouts
+func FormatPeerStatus(peerState *peer.State) string {
+	isConnected := peerState.ConnStatus == peer.StatusConnected
+	hasRecentHandshake := !peerState.LastWireguardHandshake.IsZero() &&
+		time.Since(peerState.LastWireguardHandshake) < 3*time.Minute
+
+	statusInfo := fmt.Sprintf("%s:%s", peerState.FQDN, peerState.IP)
+
+	switch {
+	case !isConnected:
+		statusInfo += " DISCONNECTED"
+	case !hasRecentHandshake:
+		statusInfo += " NO_RECENT_HANDSHAKE"
+	default:
+		statusInfo += " connected"
+	}
+
+	if !peerState.LastWireguardHandshake.IsZero() {
+		timeSinceHandshake := time.Since(peerState.LastWireguardHandshake)
+		statusInfo += fmt.Sprintf(" last_handshake=%v_ago", timeSinceHandshake.Truncate(time.Second))
+	} else {
+		statusInfo += " no_handshake"
+	}
+
+	if peerState.Relayed {
+		statusInfo += " via_relay"
+	}
+
+	if peerState.Latency > 0 {
+		statusInfo += fmt.Sprintf(" latency=%v", peerState.Latency)
+	}
+
+	return statusInfo
+}
+
+// findPeerForIP finds which peer handles the given IP address
+func findPeerForIP(ip netip.Addr, statusRecorder *peer.Status) *peer.State {
+	if statusRecorder == nil {
+		return nil
+	}
+
+	fullStatus := statusRecorder.GetFullStatus()
+	var bestMatch *peer.State
+	var bestPrefixLen int
+
+	for _, peerState := range fullStatus.Peers {
+		routes := peerState.GetRoutes()
+		for route := range routes {
+			prefix, err := netip.ParsePrefix(route)
+			if err != nil {
+				continue
+			}
+
+			if prefix.Contains(ip) && prefix.Bits() > bestPrefixLen {
+				peerStateCopy := peerState
+				bestMatch = &peerStateCopy
+				bestPrefixLen = prefix.Bits()
+			}
+		}
+	}
+
+	return bestMatch
+}
+
+func (u *upstreamResolverBase) debugUpstreamTimeout(upstream netip.AddrPort) string {
+	if u.statusRecorder == nil {
+		return ""
+	}
+
+	peerInfo := findPeerForIP(upstream.Addr(), u.statusRecorder)
+	if peerInfo == nil {
+		return ""
+	}
+
+	return fmt.Sprintf("(routes through NetBird peer %s)", FormatPeerStatus(peerInfo))
+}
diff --git a/client/internal/dns/upstream_android.go b/client/internal/dns/upstream_android.go
index ddbf84ae4..6b7dcc05e 100644
--- a/client/internal/dns/upstream_android.go
+++ b/client/internal/dns/upstream_android.go
@@ -50,7 +50,9 @@ func (u *upstreamResolver) exchange(ctx context.Context, upstream string, r *dns
 }
 
 func (u *upstreamResolver) exchangeWithinVPN(ctx context.Context, upstream string, r *dns.Msg) (rm *dns.Msg, t time.Duration, err error) {
-	upstreamExchangeClient := &dns.Client{}
+	upstreamExchangeClient := &dns.Client{
+		Timeout: ClientTimeout,
+	}
 	return upstreamExchangeClient.ExchangeContext(ctx, r, upstream)
 }
 
@@ -72,10 +74,11 @@ func (u *upstreamResolver) exchangeWithoutVPN(ctx context.Context, upstream stri
 	}
 
 	upstreamExchangeClient := &dns.Client{
-		Dialer: dialer,
+		Dialer:  dialer,
+		Timeout: timeout,
 	}
 
-	return upstreamExchangeClient.Exchange(r, upstream)
+	return upstreamExchangeClient.ExchangeContext(ctx, r, upstream)
 }
 
 func (u *upstreamResolver) isLocalResolver(upstream string) bool {
diff --git a/client/internal/dns/upstream_general.go b/client/internal/dns/upstream_general.go
index 317588a27..434e5880b 100644
--- a/client/internal/dns/upstream_general.go
+++ b/client/internal/dns/upstream_general.go
@@ -34,7 +34,10 @@ func newUpstreamResolver(
 }
 
 func (u *upstreamResolver) exchange(ctx context.Context, upstream string, r *dns.Msg) (rm *dns.Msg, t time.Duration, err error) {
-	return ExchangeWithFallback(ctx, &dns.Client{}, r, upstream)
+	client := &dns.Client{
+		Timeout: ClientTimeout,
+	}
+	return ExchangeWithFallback(ctx, client, r, upstream)
 }
 
 func GetClientPrivate(ip netip.Addr, interfaceName string, dialTimeout time.Duration) (*dns.Client, error) {
diff --git a/client/internal/dns/upstream_ios.go b/client/internal/dns/upstream_ios.go
index 96b8bbb0f..eadcdd117 100644
--- a/client/internal/dns/upstream_ios.go
+++ b/client/internal/dns/upstream_ios.go
@@ -47,7 +47,9 @@ func newUpstreamResolver(
 }
 
 func (u *upstreamResolverIOS) exchange(ctx context.Context, upstream string, r *dns.Msg) (rm *dns.Msg, t time.Duration, err error) {
-	client := &dns.Client{}
+	client := &dns.Client{
+		Timeout: ClientTimeout,
+	}
 	upstreamHost, _, err := net.SplitHostPort(upstream)
 	if err != nil {
 		return nil, 0, fmt.Errorf("error while parsing upstream host: %s", err)
@@ -110,7 +112,8 @@ func GetClientPrivate(ip netip.Addr, interfaceName string, dialTimeout time.Dura
 		},
 	}
 	client := &dns.Client{
-		Dialer: dialer,
+		Dialer:  dialer,
+		Timeout: dialTimeout,
 	}
 	return client, nil
 }
diff --git a/client/internal/dns/upstream_test.go b/client/internal/dns/upstream_test.go
index 51d870e2a..e1573e75e 100644
--- a/client/internal/dns/upstream_test.go
+++ b/client/internal/dns/upstream_test.go
@@ -124,29 +124,26 @@ func (c mockUpstreamResolver) exchange(_ context.Context, _ string, _ *dns.Msg)
 }
 
 func TestUpstreamResolver_DeactivationReactivation(t *testing.T) {
+	mockClient := &mockUpstreamResolver{
+		err: dns.ErrTime,
+		r:   new(dns.Msg),
+		rtt: time.Millisecond,
+	}
+
 	resolver := &upstreamResolverBase{
-		ctx: context.TODO(),
-		upstreamClient: &mockUpstreamResolver{
-			err: nil,
-			r:   new(dns.Msg),
-			rtt: time.Millisecond,
-		},
+		ctx:              context.TODO(),
+		upstreamClient:   mockClient,
 		upstreamTimeout:  UpstreamTimeout,
-		reactivatePeriod: reactivatePeriod,
-		failsTillDeact:   failsTillDeact,
+		reactivatePeriod: time.Microsecond * 100,
 	}
 	addrPort, _ := netip.ParseAddrPort("0.0.0.0:1") // Use valid port for parsing, test will still fail on connection
 	resolver.upstreamServers = []netip.AddrPort{netip.AddrPortFrom(addrPort.Addr().Unmap(), addrPort.Port())}
-	resolver.failsTillDeact = 0
-	resolver.reactivatePeriod = time.Microsecond * 100
-
-	responseWriter := &test.MockResponseWriter{
-		WriteMsgFunc: func(m *dns.Msg) error { return nil },
-	}
 
 	failed := false
 	resolver.deactivate = func(error) {
 		failed = true
+		// After deactivation, make the mock client work again
+		mockClient.err = nil
 	}
 
 	reactivated := false
@@ -154,7 +151,7 @@ func TestUpstreamResolver_DeactivationReactivation(t *testing.T) {
 		reactivated = true
 	}
 
-	resolver.ServeDNS(responseWriter, new(dns.Msg).SetQuestion("one.one.one.one.", dns.TypeA))
+	resolver.ProbeAvailability()
 
 	if !failed {
 		t.Errorf("expected that resolving was deactivated")
@@ -173,11 +170,6 @@ func TestUpstreamResolver_DeactivationReactivation(t *testing.T) {
 		return
 	}
 
-	if resolver.failsCount.Load() != 0 {
-		t.Errorf("fails count after reactivation should be 0")
-		return
-	}
-
 	if resolver.disabled {
 		t.Errorf("should be enabled")
 	}
diff --git a/client/internal/engine.go b/client/internal/engine.go
index c1c67207b..c610de41e 100644
--- a/client/internal/engine.go
+++ b/client/internal/engine.go
@@ -7,6 +7,7 @@ import (
 	"math/rand"
 	"net"
 	"net/netip"
+	"net/url"
 	"os"
 	"reflect"
 	"runtime"
@@ -33,6 +34,7 @@ import (
 	nbnetstack "github.com/netbirdio/netbird/client/iface/netstack"
 	"github.com/netbirdio/netbird/client/internal/acl"
 	"github.com/netbirdio/netbird/client/internal/dns"
+	dnsconfig "github.com/netbirdio/netbird/client/internal/dns/config"
 	"github.com/netbirdio/netbird/client/internal/dnsfwd"
 	"github.com/netbirdio/netbird/client/internal/ingressgw"
 	"github.com/netbirdio/netbird/client/internal/netflow"
@@ -345,7 +347,7 @@ func (e *Engine) Stop() error {
 // Start creates a new WireGuard tunnel interface and listens to events from Signal and Management services
 // Connections to remote peers are not established here.
 // However, they will be established once an event with a list of peers to connect to will be received from Management Service
-func (e *Engine) Start() error {
+func (e *Engine) Start(netbirdConfig *mgmProto.NetbirdConfig, mgmtURL *url.URL) error {
 	e.syncMsgMux.Lock()
 	defer e.syncMsgMux.Unlock()
 
@@ -401,6 +403,11 @@ func (e *Engine) Start() error {
 	}
 	e.dnsServer = dnsServer
 
+	// Populate DNS cache with NetbirdConfig and management URL for early resolution
+	if err := e.PopulateNetbirdConfig(netbirdConfig, mgmtURL); err != nil {
+		log.Warnf("failed to populate DNS cache: %v", err)
+	}
+
 	e.routeManager = routemanager.NewManager(routemanager.ManagerConfig{
 		Context:             e.ctx,
 		PublicKey:           e.config.WgPrivateKey.PublicKey().String(),
@@ -661,6 +668,30 @@ func (e *Engine) removePeer(peerKey string) error {
 	return nil
 }
 
+// PopulateNetbirdConfig populates the DNS cache with infrastructure domains from login response
+func (e *Engine) PopulateNetbirdConfig(netbirdConfig *mgmProto.NetbirdConfig, mgmtURL *url.URL) error {
+	if e.dnsServer == nil {
+		return nil
+	}
+
+	// Populate management URL if provided
+	if mgmtURL != nil {
+		if err := e.dnsServer.PopulateManagementDomain(mgmtURL); err != nil {
+			log.Warnf("failed to populate DNS cache with management URL: %v", err)
+		}
+	}
+
+	// Populate NetbirdConfig domains if provided
+	if netbirdConfig != nil {
+		serverDomains := dnsconfig.ExtractFromNetbirdConfig(netbirdConfig)
+		if err := e.dnsServer.UpdateServerConfig(serverDomains); err != nil {
+			return fmt.Errorf("update DNS server config from NetbirdConfig: %w", err)
+		}
+	}
+
+	return nil
+}
+
 func (e *Engine) handleSync(update *mgmProto.SyncResponse) error {
 	e.syncMsgMux.Lock()
 	defer e.syncMsgMux.Unlock()
@@ -692,6 +723,10 @@ func (e *Engine) handleSync(update *mgmProto.SyncResponse) error {
 			return fmt.Errorf("handle the flow configuration: %w", err)
 		}
 
+		if err := e.PopulateNetbirdConfig(wCfg, nil); err != nil {
+			log.Warnf("Failed to update DNS server config: %v", err)
+		}
+
 		// todo update signal
 	}
 
@@ -1557,7 +1592,14 @@ func (e *Engine) newDnsServer(dnsConfig *nbdns.Config) (dns.Server, error) {
 		return dnsServer, nil
 
 	default:
-		dnsServer, err := dns.NewDefaultServer(e.ctx, e.wgInterface, e.config.CustomDNSAddress, e.statusRecorder, e.stateManager, e.config.DisableDNS)
+
+		dnsServer, err := dns.NewDefaultServer(e.ctx, dns.DefaultServerConfig{
+			WgInterface:    e.wgInterface,
+			CustomAddress:  e.config.CustomDNSAddress,
+			StatusRecorder: e.statusRecorder,
+			StateManager:   e.stateManager,
+			DisableSys:     e.config.DisableDNS,
+		})
 		if err != nil {
 			return nil, err
 		}
diff --git a/client/internal/engine_test.go b/client/internal/engine_test.go
index 9d6361bc0..fc58dbdba 100644
--- a/client/internal/engine_test.go
+++ b/client/internal/engine_test.go
@@ -266,7 +266,7 @@ func TestEngine_SSH(t *testing.T) {
 			},
 		}, nil
 	}
-	err = engine.Start()
+	err = engine.Start(nil, nil)
 	if err != nil {
 		t.Fatal(err)
 	}
@@ -612,7 +612,7 @@ func TestEngine_Sync(t *testing.T) {
 		}
 	}()
 
-	err = engine.Start()
+	err = engine.Start(nil, nil)
 	if err != nil {
 		t.Fatal(err)
 		return
@@ -1069,7 +1069,7 @@ func TestEngine_MultiplePeers(t *testing.T) {
 			defer mu.Unlock()
 			guid := fmt.Sprintf("{%s}", uuid.New().String())
 			device.CustomWindowsGUIDString = strings.ToLower(guid)
-			err = engine.Start()
+			err = engine.Start(nil, nil)
 			if err != nil {
 				t.Errorf("unable to start engine for peer %d with error %v", j, err)
 				wg.Done()
diff --git a/client/internal/login.go b/client/internal/login.go
index d5412a110..257e3c3ac 100644
--- a/client/internal/login.go
+++ b/client/internal/login.go
@@ -40,7 +40,7 @@ func IsLoginRequired(ctx context.Context, config *profilemanager.Config) (bool,
 		return false, err
 	}
 
-	_, err = doMgmLogin(ctx, mgmClient, pubSSHKey, config)
+	_, _, err = doMgmLogin(ctx, mgmClient, pubSSHKey, config)
 	if isLoginNeeded(err) {
 		return true, nil
 	}
@@ -69,14 +69,18 @@ func Login(ctx context.Context, config *profilemanager.Config, setupKey string,
 		return err
 	}
 
-	serverKey, err := doMgmLogin(ctx, mgmClient, pubSSHKey, config)
+	serverKey, _, err := doMgmLogin(ctx, mgmClient, pubSSHKey, config)
 	if serverKey != nil && isRegistrationNeeded(err) {
 		log.Debugf("peer registration required")
 		_, err = registerPeer(ctx, *serverKey, mgmClient, setupKey, jwtToken, pubSSHKey, config)
+		if err != nil {
+			return err
+		}
+	} else if err != nil {
 		return err
 	}
 
-	return err
+	return nil
 }
 
 func getMgmClient(ctx context.Context, privateKey string, mgmURL *url.URL) (*mgm.GrpcClient, error) {
@@ -101,11 +105,11 @@ func getMgmClient(ctx context.Context, privateKey string, mgmURL *url.URL) (*mgm
 	return mgmClient, err
 }
 
-func doMgmLogin(ctx context.Context, mgmClient *mgm.GrpcClient, pubSSHKey []byte, config *profilemanager.Config) (*wgtypes.Key, error) {
+func doMgmLogin(ctx context.Context, mgmClient *mgm.GrpcClient, pubSSHKey []byte, config *profilemanager.Config) (*wgtypes.Key, *mgmProto.LoginResponse, error) {
 	serverKey, err := mgmClient.GetServerPublicKey()
 	if err != nil {
 		log.Errorf("failed while getting Management Service public key: %v", err)
-		return nil, err
+		return nil, nil, err
 	}
 
 	sysInfo := system.GetInfo(ctx)
@@ -121,8 +125,8 @@ func doMgmLogin(ctx context.Context, mgmClient *mgm.GrpcClient, pubSSHKey []byte
 		config.BlockInbound,
 		config.LazyConnectionEnabled,
 	)
-	_, err = mgmClient.Login(*serverKey, sysInfo, pubSSHKey, config.DNSLabels)
-	return serverKey, err
+	loginResp, err := mgmClient.Login(*serverKey, sysInfo, pubSSHKey, config.DNSLabels)
+	return serverKey, loginResp, err
 }
 
 // registerPeer checks whether setupKey was provided via cmd line and if not then it prompts user to enter a key.
diff --git a/client/internal/routemanager/dnsinterceptor/handler.go b/client/internal/routemanager/dnsinterceptor/handler.go
index ba27df654..9069cdcc5 100644
--- a/client/internal/routemanager/dnsinterceptor/handler.go
+++ b/client/internal/routemanager/dnsinterceptor/handler.go
@@ -2,11 +2,13 @@ package dnsinterceptor
 
 import (
 	"context"
+	"errors"
 	"fmt"
 	"net/netip"
 	"runtime"
 	"strings"
 	"sync"
+	"time"
 
 	"github.com/hashicorp/go-multierror"
 	"github.com/miekg/dns"
@@ -26,6 +28,8 @@ import (
 	"github.com/netbirdio/netbird/route"
 )
 
+const dnsTimeout = 8 * time.Second
+
 type domainMap map[domain.Domain][]netip.Prefix
 
 type internalDNATer interface {
@@ -243,7 +247,7 @@ func (d *DnsInterceptor) ServeDNS(w dns.ResponseWriter, r *dns.Msg) {
 		return
 	}
 
-	client, err := nbdns.GetClientPrivate(d.wgInterface.Address().IP, d.wgInterface.Name(), nbdns.UpstreamTimeout)
+	client, err := nbdns.GetClientPrivate(d.wgInterface.Address().IP, d.wgInterface.Name(), dnsTimeout)
 	if err != nil {
 		d.writeDNSError(w, r, logger, fmt.Sprintf("create DNS client: %v", err))
 		return
@@ -254,9 +258,20 @@ func (d *DnsInterceptor) ServeDNS(w dns.ResponseWriter, r *dns.Msg) {
 	}
 
 	upstream := fmt.Sprintf("%s:%d", upstreamIP.String(), dnsfwd.ListenPort)
-	reply, _, err := nbdns.ExchangeWithFallback(context.TODO(), client, r, upstream)
+	ctx, cancel := context.WithTimeout(context.Background(), dnsTimeout)
+	defer cancel()
+
+	startTime := time.Now()
+	reply, _, err := nbdns.ExchangeWithFallback(ctx, client, r, upstream)
 	if err != nil {
-		logger.Errorf("failed to exchange DNS request with %s (%s) for domain=%s: %v", upstreamIP.String(), peerKey, r.Question[0].Name, err)
+		if errors.Is(err, context.DeadlineExceeded) {
+			elapsed := time.Since(startTime)
+			peerInfo := d.debugPeerTimeout(upstreamIP, peerKey)
+			logger.Errorf("peer DNS timeout after %v (timeout=%v) for domain=%s to peer %s (%s)%s - error: %v",
+				elapsed.Truncate(time.Millisecond), dnsTimeout, r.Question[0].Name, upstreamIP.String(), peerKey, peerInfo, err)
+		} else {
+			logger.Errorf("failed to exchange DNS request with %s (%s) for domain=%s: %v", upstreamIP.String(), peerKey, r.Question[0].Name, err)
+		}
 		if err := w.WriteMsg(&dns.Msg{MsgHdr: dns.MsgHdr{Rcode: dns.RcodeServerFailure, Id: r.Id}}); err != nil {
 			logger.Errorf("failed writing DNS response: %v", err)
 		}
@@ -568,3 +583,16 @@ func determinePrefixChanges(oldPrefixes, newPrefixes []netip.Prefix) (toAdd, toR
 	}
 	return
 }
+
+func (d *DnsInterceptor) debugPeerTimeout(peerIP netip.Addr, peerKey string) string {
+	if d.statusRecorder == nil {
+		return ""
+	}
+
+	peerState, err := d.statusRecorder.GetPeer(peerKey)
+	if err != nil {
+		return fmt.Sprintf(" (peer %s state error: %v)", peerKey[:8], err)
+	}
+
+	return fmt.Sprintf(" (peer %s)", nbdns.FormatPeerStatus(&peerState))
+}