When using virtual machines for testing web apps in various browsers (e.g. Internet Explorer), I have found it rather tedious having to continually tweak the hosts file within each new VM for the purpose of adding entries pointing back to the host machine's development web server address.
Instead, the steps below will setup Dnsmasq on a Ubuntu 14.04LTS or 12.04LTS host machine for the purpose of serving both it's own DNS queries and that of virtual machine guests. Dnsmasq will parse your host's /etc/hosts file where we will keep a single set of DNS entires to our test web applications.