Question: Why did everything work on your machine when standalone
dnsmasq wasn't in bind-interfaces mode but /etc/NM/NM.conf contained
"dns=dnsmasq"?

Hypothesis: Standalone dnsmasq started first; network-manager second. NM
tried to start NM-dnsmasq but this failed because of the address
conflict and NM fell back to non-dnsmasq mode, which works fine. If this
hypothesis is correct then there may be lines in the syslog that look
like this:

   [date] [hostname] NetworkManager[pid]: <info> DNS: starting dnsmasq...
   [date] [hostname] dnsmasq[pid]: failed to create listening socket for 
127.0.1.1: Address already in use

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You received this bug notification because you are a member of Ubuntu
Server Team, which is subscribed to dnsmasq in Ubuntu.
https://bugs.launchpad.net/bugs/959037

Title:
  NM-controlled dnsmasq prevents other DNS servers from starting

To manage notifications about this bug go to:
https://bugs.launchpad.net/ubuntu/+source/djbdns/+bug/959037/+subscriptions

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