what I did:
1. add additional dns entries you want in the templates for the
/service/tinydns/root/data
the templates there are quite sufficient to guess what's going on (otherwise search dfor tinydns home )
2. add the respective name/domain you want to be resolved by your sme server (not looked up externally) in the /service/dnscache/root/servers
(this is the missing ingredient

say file "localsecret" with contents 127.0.0.1 so that server localsecret is resolved sme locally not looked up at the root dns servers
3. expand templates /flush dnscache
should work now