For a fresh install of Ubuntu 18.04 I found that libnss-resolve needed to be 
installed to fix various systemd-resolvd errors (with a setup like you 
describe, gateway does DHCP for a local net and DNS).
Your case may be different because you seem to have a null domain.  My ISP sets 
up a line like "search blah.blah.isp.net" which becomes the domain for nslookup 
of plain names (without an ending period).  When the ending period is used on 
the plain machine name, then just the name is returned without the period or 
domain and the address.
  Another problem may be that upgrades from 16.04 may result in a different 
systemd-resolvd setup.
The standard I assume is /etc/resolv.conf is a link to 
/run/systemd/resolve/stub-resolv.conf, which contains nameserver 127.0.0.53, 
options edns0, and search blah.blah.isp.net.  There is another file 
/run/systemd/resolve/resolv.conf which contains the gateway instead of 
127.0.0.53.  If you switch the /etc/resolv.conf link to this file, you cut 
systemd-resolvd out of the loop, fixing some problems but maybe causing others.
  The libnss-resolve package changes the hosts line in /etc/nsswitch.conf to:
hosts:          files mdns4_minimal [NOTFOUND=return] resolve [!UNAVAIL=return] 
dns myhostname
which fixes all problems I have noticed (including the dns failures when 
running with a reduced function set after an NXDOMAIN error (see syslog)).

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https://bugs.launchpad.net/bugs/1777579

Title:
  18.04 Desktop LTS DNS behavior (systemd-resolved)

Status in systemd package in Ubuntu:
  Expired

Bug description:
  Hi,

  I am using te latest Ubuntu Mate Desktop 18.04 LTS release and have issues 
getting local DNS to work.
  In my network I maintain a central router instance that povides DHCP and DNS 
successfully over many years. The DHCP assigns a valid address and correct DNS 
information to my above mentioned network client. However DNS resolution does 
not work for DNS records maintained in my router for my local network.
  See here: (local DNS server on .3.1)

  uho@Asus:~/Schreibtisch$ systemd-resolve --status
  Global
            DNSSEC NTA: 10.in-addr.arpa
                        16.172.in-addr.arpa
                        168.192.in-addr.arpa
                        17.172.in-addr.arpa
                        18.172.in-addr.arpa
                        19.172.in-addr.arpa
                        20.172.in-addr.arpa
                        21.172.in-addr.arpa
                        22.172.in-addr.arpa
                        23.172.in-addr.arpa
                        24.172.in-addr.arpa
                        25.172.in-addr.arpa
                        26.172.in-addr.arpa
                        27.172.in-addr.arpa
                        28.172.in-addr.arpa
                        29.172.in-addr.arpa
                        30.172.in-addr.arpa
                        31.172.in-addr.arpa
                        corp
                        d.f.ip6.arpa
                        home
                        internal
                        intranet
                        lan
                        local
                        private
                        test

  Link 2 (wlp2s0)
        Current Scopes: DNS
         LLMNR setting: yes
  MulticastDNS setting: no
        DNSSEC setting: no
      DNSSEC supported: no
           DNS Servers: 192.168.3.1
  uho@Asus:~/Schreibtisch$ 

  uho@Asus:~/Schreibtisch$ nslookup filou
  Server:               127.0.0.53
  Address:      127.0.0.53#53

  ** server can't find filou: SERVFAIL

  uho@Asus:~/Schreibtisch$ nslookup filou 192.168.3.1
  Server:               192.168.3.1
  Address:      192.168.3.1#53

  Non-authoritative answer:
  Name: filou
  Address: 192.168.3.10

  uho@Asus:~/Schreibtisch$ nslookup 192.168.3.10
  10.3.168.192.in-addr.arpa     name = filou.

  Authoritative answers can be found from:

  uho@Asus:~/Schreibtisch$

  The example above shows that DNS forward lookup for "filou" does not work, 
only reverse lookup works.
  The same behavior with explicit DNS setting in network manager.

  Any idea what's wrong? To me this looks weirdly broken.

  BTW: Old school setting in /etc/resolv.conf works like a charm.

  BR
  Uwe

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