The virtualbox documentation did not explain it clearly.
https://www.virtualbox.org/manual/ch09.html
9.11.5. Enabling DNS proxy in NAT mode The NAT engine by default offers the same DNS servers to the guest that are configured on the host. In some scenarios, it can be desirable to hide the DNS server IPs from the guest, for example when this information can change on the host due to expiring DHCP leases. In this case, you can tell the NAT engine to act as DNS proxy using the following command:
VBoxManage modifyvm "VM name" --natdnsproxy1 on
9.11.6. Using the host's resolver as a DNS proxy in NAT mode For resolving network names, the DHCP server of the NAT engine offers a list of registered DNS servers of the host. If for some reason you need to hide this DNS server list and use the host's resolver settings, thereby forcing the VirtualBox NAT engine to intercept DNS requests and forward them to host's resolver, use the following command:
VBoxManage modifyvm "VM name" --natdnshostresolver1 on Note that this setting is similar to the DNS proxy mode, however whereas the proxy mode just forwards DNS requests to the appropriate servers, the resolver mode will interpret the DNS requests and use the host's DNS API to query the information and return it to the guest.
can anyone really understand the difference?
EDIT: need a actual example.