To allow a DNS server to operate use the following rules (assuming your blocking inbound and outbound in iptables)
DNS communicated in to destination port 53 but can come from any port in the upper range. So these rules require a large section of ports to allow access as long as they want to talk to 53.
iptables -A OUTPUT -p udp –dport 53 –sport 1024:65535 -j ACCEPT
iptables -A INPUT -p udp –dport 53 –sport 1024:65535 -j ACCEPT