I have a Vnet with 2 virtual machines and 2 container instances.
I have 2 subnets, 10.0.0.0/24 and 10.0.1.0/24, because apparently Container Instances cannot be deployed in subnets that have other types of resources for some reason.

I have a Private DNS Zone with automatic registration, linked to this vnet and the 2 VMs can resolve each other by name. They also show up in the list of registered records, resolving to 10.0.0.4 and 10.0.0.5 respectively.

However, when I try to connect from the Container Instance to the VM, the name does not resolve. If I connect directly by IP address it works.

Furthermore the 2 container instances don't even show up in the Private DNS Zone.

Is there anything I need to do for my ACI to make use of the Private DNS Zone just like the normal VMs are doing? Why are they not resolving names through the Private DNS Zone as they should?

@jbx999 Just want to comment that we have the exact same problems with ACI only being able to reach the Private DNS in the VNet in which the ACIs are deployed for around 50% of our ACI deploys.

We run approximately 50 ACIs in the West Europe Azure region, and had no issues with Private DNS from May 2020 to end of Jan 2021.

Then, suddenly around 50% of ACI deploys couldn't reach Private DNS and therefore not reach neighbour ACIs in the same VNet, nor Private Endpoints to databases deployed in the same VNet.

Since ACIs may change internal IPs on auto-restart, and since private db-endpoints are also registered in the Private DNS Zone, this problem creates big difficulties for us.

Not that it is a solution or sustainable; but have you tried redeploying ACIs (alternatively stop + start (not restart) through the Azure Portal Interface) with a different outcome? Like I said, for us Private DNS is ok for ca 50% of our ACI deploys.