This appears to be an issue when the 'dns-root-data' package is installed (In my case it was used by pdns). It's by default in BIND zone-file format. Dnsmasq requires it to be reformatted into a format friendly to dnsmasq on the command line.
The /etc/init.d/dnsmasq file attempts to do this but does not do it correctly. I'm not exactly sure what the exact line change is that needs to be done. In my case I didn't need the dns-root-data package since I was no longer using pdns and uninstalled it. Package: dnsmasq Status: install ok installed Priority: optional Section: net Installed-Size: 71 Maintainer: Simon Kelley <si...@thekelleys.org.uk> Architecture: all Version: 2.76-5 Depends: netbase, dnsmasq-base (>= 2.76-5), init-system-helpers (>= 1.18~) Suggests: resolvconf Conflicts: resolvconf (<< 1.15) Conffiles: /etc/init.d/dnsmasq 619ec632736050c3f49e43ecf218efce /etc/default/dnsmasq 8528b9b07acf4cbac231eb21dd3d262c /etc/dnsmasq.conf bc949f5cad485a88b585271b933f0c05 /etc/resolvconf/update.d/dnsmasq 79d449fe3b873444952bc1192bb53f0c /etc/insserv.conf.d/dnsmasq 530a424ac064ea9d86f235d12ecc227a Description: Small caching DNS proxy and DHCP/TFTP server Dnsmasq is a lightweight, easy to configure, DNS forwarder and DHCP server. It is designed to provide DNS and optionally, DHCP, to a small network. It can serve the names of local machines which are not in the global DNS. The DHCP server integrates with the DNS server and allows machines with DHCP-allocated addresses to appear in the DNS with names configured either in each host or in a central configuration file. Dnsmasq supports static and dynamic DHCP leases and BOOTP/TFTP for network booting of diskless machines.
