From ff7c715c5fb0e20042d285c49e27afd02ebc6e49 Mon Sep 17 00:00:00 2001
From: Eugene Burkov <e.burkov@adguard.com>
Date: Thu, 11 Apr 2024 14:03:37 +0300
Subject: [PATCH] Pull request 2193: AGDNS-1982 Upd proxy

Closes #6854.Updates #6875.

Squashed commit of the following:

commit b98adbc0cc6eeaffb262d57775c487e03b1d5ba5
Author: Eugene Burkov <E.Burkov@AdGuard.COM>
Date:   Wed Apr 10 19:21:44 2024 +0300

    dnsforward: upd proxy, imp code, docs

commit 4de1eb2bca1047426e02ba680c212f46782e5616
Author: Eugene Burkov <E.Burkov@AdGuard.COM>
Date:   Wed Apr 10 16:09:58 2024 +0300

    WIP

commit afa9d61e8dc129f907dc681cd2f831cb5c3b054a
Author: Eugene Burkov <E.Burkov@AdGuard.COM>
Date:   Tue Apr 9 19:24:09 2024 +0300

    all: log changes

commit c8340676a448687a39acd26bc8ce5f94473e441f
Author: Eugene Burkov <E.Burkov@AdGuard.COM>
Date:   Tue Apr 9 19:06:10 2024 +0300

    dnsforward: move code

commit 08bb7d43d2a3f689ef2ef2409935dc3946752e94
Author: Eugene Burkov <E.Burkov@AdGuard.COM>
Date:   Tue Apr 9 18:09:46 2024 +0300

    dnsforward: imp code

commit b27547ec806dd9bce502d3c6a7c28f33693ed575
Merge: b7efca788 6f36ebc06
Author: Eugene Burkov <E.Burkov@AdGuard.COM>
Date:   Tue Apr 9 17:33:19 2024 +0300

    Merge branch 'master' into AGDNS-1982-upd-proxy

commit b7efca788b66aa672598b088040d4534ce2e55b0
Author: Eugene Burkov <E.Burkov@AdGuard.COM>
Date:   Tue Apr 9 17:27:14 2024 +0300

    all: upd proxy finally

commit 3e16fa87befe4c0ef3a3e7a638d7add28627f9b6
Author: Eugene Burkov <E.Burkov@AdGuard.COM>
Date:   Fri Apr 5 18:20:13 2024 +0300

    dnsforward: upd proxy

commit f3cdfc86334a182effcd0de22fac5e678fa53ea7
Author: Eugene Burkov <E.Burkov@AdGuard.COM>
Date:   Thu Apr 4 20:37:32 2024 +0300

    all: upd proxy, golibs

commit a79298d6d0504521893ee11fdc3a23c098aea911
Merge: 9feeba5c7 fd25dcacb
Author: Eugene Burkov <E.Burkov@AdGuard.COM>
Date:   Thu Apr 4 20:34:01 2024 +0300

    Merge branch 'master' into AGDNS-1982-upd-proxy

commit 9feeba5c7f24ff1d308a216608d985cb2a7b7588
Author: Eugene Burkov <E.Burkov@AdGuard.COM>
Date:   Thu Apr 4 20:25:57 2024 +0300

    all: imp code, docs

commit 6c68d463db64293eb9c5e29ff91879fd68920a77
Merge: d8108e651 ee619b2db
Author: Eugene Burkov <E.Burkov@AdGuard.COM>
Date:   Thu Apr 4 18:46:11 2024 +0300

    Merge branch 'master' into AGDNS-1982-upd-proxy

commit d8108e65164df8d67aa4e95154a8768a06255b78
Author: Eugene Burkov <E.Burkov@AdGuard.COM>
Date:   Wed Apr 3 19:25:27 2024 +0300

    all: imp code

commit 20461565801c9fcd06a652c6066b524b06c80433
Author: Eugene Burkov <E.Burkov@AdGuard.COM>
Date:   Wed Apr 3 17:10:33 2024 +0300

    all: remove private rdns logic
---
 CHANGELOG.md                                  |  10 +
 go.mod                                        |  10 +-
 go.sum                                        |  26 +-
 internal/dnsforward/beforerequest.go          | 113 +++++
 internal/dnsforward/clientid.go               |  40 --
 internal/dnsforward/config.go                 |  79 ++--
 internal/dnsforward/dns64_test.go             |  73 +++-
 internal/dnsforward/dnsforward.go             | 273 ++++++-------
 internal/dnsforward/dnsrewrite.go             |   2 +-
 internal/dnsforward/filter.go                 |  40 --
 internal/dnsforward/http.go                   | 118 +++---
 internal/dnsforward/http_test.go              |  57 +--
 internal/dnsforward/msg.go                    | 127 +++---
 internal/dnsforward/process.go                | 287 ++-----------
 internal/dnsforward/process_internal_test.go  | 386 +++++++-----------
 internal/dnsforward/recursiondetector.go      | 115 ------
 internal/dnsforward/recursiondetector_test.go | 148 -------
 internal/dnsforward/upstreams.go              | 215 ++++------
 internal/home/dns.go                          |  11 +-
 19 files changed, 765 insertions(+), 1365 deletions(-)
 create mode 100644 internal/dnsforward/beforerequest.go
 delete mode 100644 internal/dnsforward/recursiondetector.go
 delete mode 100644 internal/dnsforward/recursiondetector_test.go

diff --git a/CHANGELOG.md b/CHANGELOG.md
index dd068218..09d21602 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -27,7 +27,17 @@ NOTE: Add new changes BELOW THIS COMMENT.
 
 - Support for comments in the ipset file ([#5345]).
 
+### Fixed
+
+- Subdomains of `in-addr.arpa` and `ip6.arpa` containing zero-length prefix
+  incorrectly considered invalid when specified for private RDNS upstream
+  servers ([#6854]).
+- Unspecified IP addresses aren't checked when using "Fastest IP address" mode
+  ([#6875]).
+
 [#5345]: https://github.com/AdguardTeam/AdGuardHome/issues/5345
+[#6854]: https://github.com/AdguardTeam/AdGuardHome/issues/6854
+[#6875]: https://github.com/AdguardTeam/AdGuardHome/issues/6875
 
 <!--
 NOTE: Add new changes ABOVE THIS COMMENT.
diff --git a/go.mod b/go.mod
index 33c55e4e..5a3ed07b 100644
--- a/go.mod
+++ b/go.mod
@@ -3,8 +3,8 @@ module github.com/AdguardTeam/AdGuardHome
 go 1.22.2
 
 require (
-	github.com/AdguardTeam/dnsproxy v0.67.0
-	github.com/AdguardTeam/golibs v0.21.0
+	github.com/AdguardTeam/dnsproxy v0.69.1
+	github.com/AdguardTeam/golibs v0.23.0
 	github.com/AdguardTeam/urlfilter v0.18.0
 	github.com/NYTimes/gziphandler v1.1.1
 	github.com/ameshkov/dnscrypt/v2 v2.2.7
@@ -28,12 +28,12 @@ require (
 	// own code for that.  Perhaps, use gopacket.
 	github.com/mdlayher/raw v0.1.0
 	github.com/miekg/dns v1.1.58
-	github.com/quic-go/quic-go v0.41.0
-	github.com/stretchr/testify v1.8.4
+	github.com/quic-go/quic-go v0.42.0
+	github.com/stretchr/testify v1.9.0
 	github.com/ti-mo/netfilter v0.5.1
 	go.etcd.io/bbolt v1.3.9
 	golang.org/x/crypto v0.21.0
-	golang.org/x/exp v0.0.0-20240222234643-814bf88cf225
+	golang.org/x/exp v0.0.0-20240325151524-a685a6edb6d8
 	golang.org/x/net v0.23.0
 	golang.org/x/sys v0.18.0
 	gopkg.in/natefinch/lumberjack.v2 v2.2.1
diff --git a/go.sum b/go.sum
index dcc87019..6b04e9b2 100644
--- a/go.sum
+++ b/go.sum
@@ -1,7 +1,7 @@
-github.com/AdguardTeam/dnsproxy v0.67.0 h1:7oKfcA8sm9d1N4qvhsNmQWBX4+fs3sX4cAnERmBXEbw=
-github.com/AdguardTeam/dnsproxy v0.67.0/go.mod h1:XLfD6IpSplUZZ+f5vhWSJW1mp4wm+KkHWiMo9w7U1Ls=
-github.com/AdguardTeam/golibs v0.21.0 h1:0swWyNaHTmT7aMwffKd9d54g4wBd8Oaj0fl+5l/PRdE=
-github.com/AdguardTeam/golibs v0.21.0/go.mod h1:/votX6WK1PdcZ3T2kBOPjPCGmfhlKixhI6ljYrFRPvI=
+github.com/AdguardTeam/dnsproxy v0.69.1 h1:KiLkKUSrvHeUO/YEf4Bbo/5zyFRIvQstjL7W9G/24pk=
+github.com/AdguardTeam/dnsproxy v0.69.1/go.mod h1:atO3WeeuyepyhjSt6hC+MF7/IN7TZHfG3/ZwhImHzYs=
+github.com/AdguardTeam/golibs v0.23.0 h1:PHz/QhJhLmoaOokkqrPFUgu9Hw4iVAqLtBP0O3g1D3Q=
+github.com/AdguardTeam/golibs v0.23.0/go.mod h1:/xZCf6gZZzz7k1qaoJmI+hhxN98kHFr7LJ22j1nLH0c=
 github.com/AdguardTeam/urlfilter v0.18.0 h1:ZZzwODC/ADpjJSODxySrrUnt/fvOCfGFaCW6j+wsGfQ=
 github.com/AdguardTeam/urlfilter v0.18.0/go.mod h1:IXxBwedLiZA2viyHkaFxY/8mjub0li2PXRg8a3d9Z1s=
 github.com/NYTimes/gziphandler v1.1.1 h1:ZUDjpQae29j0ryrS0u/B8HZfJBtBQHjqw2rQ2cqUQ3I=
@@ -101,19 +101,19 @@ github.com/power-devops/perfstat v0.0.0-20210106213030-5aafc221ea8c h1:ncq/mPwQF
 github.com/power-devops/perfstat v0.0.0-20210106213030-5aafc221ea8c/go.mod h1:OmDBASR4679mdNQnz2pUhc2G8CO2JrUAVFDRBDP/hJE=
 github.com/quic-go/qpack v0.4.0 h1:Cr9BXA1sQS2SmDUWjSofMPNKmvF6IiIfDRmgU0w1ZCo=
 github.com/quic-go/qpack v0.4.0/go.mod h1:UZVnYIfi5GRk+zI9UMaCPsmZ2xKJP7XBUvVyT1Knj9A=
-github.com/quic-go/quic-go v0.41.0 h1:aD8MmHfgqTURWNJy48IYFg2OnxwHT3JL7ahGs73lb4k=
-github.com/quic-go/quic-go v0.41.0/go.mod h1:qCkNjqczPEvgsOnxZ0eCD14lv+B2LHlFAB++CNOh9hA=
+github.com/quic-go/quic-go v0.42.0 h1:uSfdap0eveIl8KXnipv9K7nlwZ5IqLlYOpJ58u5utpM=
+github.com/quic-go/quic-go v0.42.0/go.mod h1:132kz4kL3F9vxhW3CtQJLDVwcFe5wdWeJXXijhsO57M=
 github.com/shirou/gopsutil/v3 v3.23.7 h1:C+fHO8hfIppoJ1WdsVm1RoI0RwXoNdfTK7yWXV0wVj4=
 github.com/shirou/gopsutil/v3 v3.23.7/go.mod h1:c4gnmoRC0hQuaLqvxnx1//VXQ0Ms/X9UnJF8pddY5z4=
 github.com/shoenig/go-m1cpu v0.1.6 h1:nxdKQNcEB6vzgA2E2bvzKIYRuNj7XNJ4S/aRSwKzFtM=
 github.com/shoenig/go-m1cpu v0.1.6/go.mod h1:1JJMcUBvfNwpq05QDQVAnx3gUHr9IYF7GNg9SUEw2VQ=
 github.com/stretchr/objx v0.1.0/go.mod h1:HFkY916IF+rwdDfMAkV7OtwuqBVzrE8GR6GFx+wExME=
-github.com/stretchr/objx v0.5.0 h1:1zr/of2m5FGMsad5YfcqgdqdWrIhu+EBEJRhR1U7z/c=
-github.com/stretchr/objx v0.5.0/go.mod h1:Yh+to48EsGEfYuaHDzXPcE3xhTkx73EhmCGUpEOglKo=
+github.com/stretchr/objx v0.5.2 h1:xuMeJ0Sdp5ZMRXx/aWO6RZxdr3beISkG5/G/aIRr3pY=
+github.com/stretchr/objx v0.5.2/go.mod h1:FRsXN1f5AsAjCGJKqEizvkpNtU+EGNCLh3NxZ/8L+MA=
 github.com/stretchr/testify v1.3.0/go.mod h1:M5WIy9Dh21IEIfnGCwXGc5bZfKNJtfHm1UVUgZn+9EI=
 github.com/stretchr/testify v1.6.1/go.mod h1:6Fq8oRcR53rry900zMqJjRRixrwX3KX962/h/Wwjteg=
-github.com/stretchr/testify v1.8.4 h1:CcVxjf3Q8PM0mHUKJCdn+eZZtm5yQwehR5yeSVQQcUk=
-github.com/stretchr/testify v1.8.4/go.mod h1:sz/lmYIOXD/1dqDmKjjqLyZ2RngseejIcXlSw2iwfAo=
+github.com/stretchr/testify v1.9.0 h1:HtqpIVDClZ4nwg75+f6Lvsy/wHu+3BoSGCbBAcpTsTg=
+github.com/stretchr/testify v1.9.0/go.mod h1:r2ic/lqez/lEtzL7wO/rwa5dbSLXVDPFyf8C91i36aY=
 github.com/ti-mo/netfilter v0.2.0/go.mod h1:8GbBGsY/8fxtyIdfwy29JiluNcPK4K7wIT+x42ipqUU=
 github.com/ti-mo/netfilter v0.5.1 h1:cqamEd1c1zmpfpqvInLOro0Znq/RAfw2QL5wL2rAR/8=
 github.com/ti-mo/netfilter v0.5.1/go.mod h1:h9UPQ3ZrTZGBitay+LETMxZvNgWGK/efTUcqES2YiLw=
@@ -133,8 +133,8 @@ golang.org/x/crypto v0.0.0-20190308221718-c2843e01d9a2/go.mod h1:djNgcEr1/C05ACk
 golang.org/x/crypto v0.0.0-20191011191535-87dc89f01550/go.mod h1:yigFU9vqHzYiE8UmvKecakEJjdnWj3jj499lnFckfCI=
 golang.org/x/crypto v0.21.0 h1:X31++rzVUdKhX5sWmSOFZxx8UW/ldWx55cbf08iNAMA=
 golang.org/x/crypto v0.21.0/go.mod h1:0BP7YvVV9gBbVKyeTG0Gyn+gZm94bibOW5BjDEYAOMs=
-golang.org/x/exp v0.0.0-20240222234643-814bf88cf225 h1:LfspQV/FYTatPTr/3HzIcmiUFH7PGP+OQ6mgDYo3yuQ=
-golang.org/x/exp v0.0.0-20240222234643-814bf88cf225/go.mod h1:CxmFvTBINI24O/j8iY7H1xHzx2i4OsyguNBmN/uPtqc=
+golang.org/x/exp v0.0.0-20240325151524-a685a6edb6d8 h1:aAcj0Da7eBAtrTp03QXWvm88pSyOt+UgdZw2BFZ+lEw=
+golang.org/x/exp v0.0.0-20240325151524-a685a6edb6d8/go.mod h1:CQ1k9gNrJ50XIzaKCRR2hssIjF07kZFEiieALBM/ARQ=
 golang.org/x/lint v0.0.0-20200302205851-738671d3881b/go.mod h1:3xt1FjdF8hUf6vQPIChWIBhFzV8gjjsPE/fR3IyQdNY=
 golang.org/x/mod v0.1.1-0.20191105210325-c90efee705ee/go.mod h1:QqPTAvyqsEbceGzBzNggFXnrqF1CaUcvgkdR5Ot7KZg=
 golang.org/x/mod v0.16.0 h1:QX4fJ0Rr5cPQCF7O9lh9Se4pmwfwskqZfq5moyldzic=
@@ -168,6 +168,8 @@ golang.org/x/text v0.3.0/go.mod h1:NqM8EUOU14njkJ3fqMW+pc6Ldnwhi/IjpwHt7yyuwOQ=
 golang.org/x/text v0.3.3/go.mod h1:5Zoc/QRtKVWzQhOtBMvqHzDpF6irO9z98xDceosuGiQ=
 golang.org/x/text v0.14.0 h1:ScX5w1eTa3QqT8oi6+ziP7dTV1S2+ALU0bI+0zXKWiQ=
 golang.org/x/text v0.14.0/go.mod h1:18ZOQIKpY8NJVqYksKHtTdi31H5itFRjB5/qKTNYzSU=
+golang.org/x/time v0.5.0 h1:o7cqy6amK/52YcAKIPlM3a+Fpj35zvRj2TP+e1xFSfk=
+golang.org/x/time v0.5.0/go.mod h1:3BpzKBy/shNhVucY/MWOyx10tF3SFh9QdLuxbVysPQM=
 golang.org/x/tools v0.0.0-20180917221912-90fa682c2a6e/go.mod h1:n7NCudcB/nEzxVGmLbDWY5pfWTLqBcC2KZ6jyYvM4mQ=
 golang.org/x/tools v0.0.0-20200130002326-2f3ba24bd6e7/go.mod h1:TB2adYChydJhpapKDTa4BR/hXlZSLoq2Wpct/0txZ28=
 golang.org/x/tools v0.19.0 h1:tfGCXNR1OsFG+sVdLAitlpjAvD/I6dHDKnYrpEZUHkw=
diff --git a/internal/dnsforward/beforerequest.go b/internal/dnsforward/beforerequest.go
new file mode 100644
index 00000000..75c64cec
--- /dev/null
+++ b/internal/dnsforward/beforerequest.go
@@ -0,0 +1,113 @@
+package dnsforward
+
+import (
+	"encoding/binary"
+	"fmt"
+
+	"github.com/AdguardTeam/AdGuardHome/internal/aghnet"
+	"github.com/AdguardTeam/dnsproxy/proxy"
+	"github.com/AdguardTeam/golibs/errors"
+	"github.com/AdguardTeam/golibs/log"
+	"github.com/miekg/dns"
+)
+
+// type check
+var _ proxy.BeforeRequestHandler = (*Server)(nil)
+
+// HandleBefore is the handler that is called before any other processing,
+// including logs.  It performs access checks and puts the client ID, if there
+// is one, into the server's cache.
+//
+// TODO(e.burkov):  Write tests.
+func (s *Server) HandleBefore(
+	_ *proxy.Proxy,
+	pctx *proxy.DNSContext,
+) (err error) {
+	clientID, err := s.clientIDFromDNSContext(pctx)
+	if err != nil {
+		return fmt.Errorf("getting clientid: %w", err)
+	}
+
+	blocked, _ := s.IsBlockedClient(pctx.Addr.Addr(), clientID)
+	if blocked {
+		return s.preBlockedResponse(pctx)
+	}
+
+	if len(pctx.Req.Question) == 1 {
+		q := pctx.Req.Question[0]
+		qt := q.Qtype
+		host := aghnet.NormalizeDomain(q.Name)
+		if s.access.isBlockedHost(host, qt) {
+			log.Debug("access: request %s %s is in access blocklist", dns.Type(qt), host)
+
+			return s.preBlockedResponse(pctx)
+		}
+	}
+
+	if clientID != "" {
+		key := [8]byte{}
+		binary.BigEndian.PutUint64(key[:], pctx.RequestID)
+		s.clientIDCache.Set(key[:], []byte(clientID))
+	}
+
+	return nil
+}
+
+// clientIDFromDNSContext extracts the client's ID from the server name of the
+// client's DoT or DoQ request or the path of the client's DoH.  If the protocol
+// is not one of these, clientID is an empty string and err is nil.
+func (s *Server) clientIDFromDNSContext(pctx *proxy.DNSContext) (clientID string, err error) {
+	proto := pctx.Proto
+	if proto == proxy.ProtoHTTPS {
+		clientID, err = clientIDFromDNSContextHTTPS(pctx)
+		if err != nil {
+			return "", fmt.Errorf("checking url: %w", err)
+		} else if clientID != "" {
+			return clientID, nil
+		}
+
+		// Go on and check the domain name as well.
+	} else if proto != proxy.ProtoTLS && proto != proxy.ProtoQUIC {
+		return "", nil
+	}
+
+	hostSrvName := s.conf.ServerName
+	if hostSrvName == "" {
+		return "", nil
+	}
+
+	cliSrvName, err := clientServerName(pctx, proto)
+	if err != nil {
+		return "", err
+	}
+
+	clientID, err = clientIDFromClientServerName(
+		hostSrvName,
+		cliSrvName,
+		s.conf.StrictSNICheck,
+	)
+	if err != nil {
+		return "", fmt.Errorf("clientid check: %w", err)
+	}
+
+	return clientID, nil
+}
+
+// errAccessBlocked is a sentinel error returned when a request is blocked by
+// access settings.
+var errAccessBlocked errors.Error = "blocked by access settings"
+
+// preBlockedResponse returns a protocol-appropriate response for a request that
+// was blocked by access settings.
+func (s *Server) preBlockedResponse(pctx *proxy.DNSContext) (err error) {
+	if pctx.Proto == proxy.ProtoUDP || pctx.Proto == proxy.ProtoDNSCrypt {
+		// Return nil so that dnsproxy drops the connection and thus
+		// prevent DNS amplification attacks.
+		return errAccessBlocked
+	}
+
+	return &proxy.BeforeRequestError{
+		Err:      errAccessBlocked,
+		Response: s.makeResponseREFUSED(pctx.Req),
+	}
+}
diff --git a/internal/dnsforward/clientid.go b/internal/dnsforward/clientid.go
index 71ad2eb0..6cda328c 100644
--- a/internal/dnsforward/clientid.go
+++ b/internal/dnsforward/clientid.go
@@ -110,46 +110,6 @@ type quicConnection interface {
 	ConnectionState() (cs quic.ConnectionState)
 }
 
-// clientIDFromDNSContext extracts the client's ID from the server name of the
-// client's DoT or DoQ request or the path of the client's DoH.  If the protocol
-// is not one of these, clientID is an empty string and err is nil.
-func (s *Server) clientIDFromDNSContext(pctx *proxy.DNSContext) (clientID string, err error) {
-	proto := pctx.Proto
-	if proto == proxy.ProtoHTTPS {
-		clientID, err = clientIDFromDNSContextHTTPS(pctx)
-		if err != nil {
-			return "", fmt.Errorf("checking url: %w", err)
-		} else if clientID != "" {
-			return clientID, nil
-		}
-
-		// Go on and check the domain name as well.
-	} else if proto != proxy.ProtoTLS && proto != proxy.ProtoQUIC {
-		return "", nil
-	}
-
-	hostSrvName := s.conf.ServerName
-	if hostSrvName == "" {
-		return "", nil
-	}
-
-	cliSrvName, err := clientServerName(pctx, proto)
-	if err != nil {
-		return "", err
-	}
-
-	clientID, err = clientIDFromClientServerName(
-		hostSrvName,
-		cliSrvName,
-		s.conf.StrictSNICheck,
-	)
-	if err != nil {
-		return "", fmt.Errorf("clientid check: %w", err)
-	}
-
-	return clientID, nil
-}
-
 // clientServerName returns the TLS server name based on the protocol.  For
 // DNS-over-HTTPS requests, it will return the hostname part of the Host header
 // if there is one.
diff --git a/internal/dnsforward/config.go b/internal/dnsforward/config.go
index 78f4acb6..4d2924ab 100644
--- a/internal/dnsforward/config.go
+++ b/internal/dnsforward/config.go
@@ -235,9 +235,18 @@ type DNSCryptConfig struct {
 // ServerConfig represents server configuration.
 // The zero ServerConfig is empty and ready for use.
 type ServerConfig struct {
-	UDPListenAddrs []*net.UDPAddr        // UDP listen address
-	TCPListenAddrs []*net.TCPAddr        // TCP listen address
-	UpstreamConfig *proxy.UpstreamConfig // Upstream DNS servers config
+	// UDPListenAddrs is the list of addresses to listen for DNS-over-UDP.
+	UDPListenAddrs []*net.UDPAddr
+
+	// TCPListenAddrs is the list of addresses to listen for DNS-over-TCP.
+	TCPListenAddrs []*net.TCPAddr
+
+	// UpstreamConfig is the general configuration of upstream DNS servers.
+	UpstreamConfig *proxy.UpstreamConfig
+
+	// PrivateRDNSUpstreamConfig is the configuration of upstream DNS servers
+	// for private reverse DNS.
+	PrivateRDNSUpstreamConfig *proxy.UpstreamConfig
 
 	// AddrProcConf defines the configuration for the client IP processor.
 	// If nil, [client.EmptyAddrProc] is used.
@@ -306,24 +315,28 @@ func (s *Server) newProxyConfig() (conf *proxy.Config, err error) {
 	trustedPrefixes := netutil.UnembedPrefixes(srvConf.TrustedProxies)
 
 	conf = &proxy.Config{
-		HTTP3:                  srvConf.ServeHTTP3,
-		Ratelimit:              int(srvConf.Ratelimit),
-		RatelimitSubnetLenIPv4: srvConf.RatelimitSubnetLenIPv4,
-		RatelimitSubnetLenIPv6: srvConf.RatelimitSubnetLenIPv6,
-		RatelimitWhitelist:     srvConf.RatelimitWhitelist,
-		RefuseAny:              srvConf.RefuseAny,
-		TrustedProxies:         netutil.SliceSubnetSet(trustedPrefixes),
-		CacheMinTTL:            srvConf.CacheMinTTL,
-		CacheMaxTTL:            srvConf.CacheMaxTTL,
-		CacheOptimistic:        srvConf.CacheOptimistic,
-		UpstreamConfig:         srvConf.UpstreamConfig,
-		BeforeRequestHandler:   s.beforeRequestHandler,
-		RequestHandler:         s.handleDNSRequest,
-		HTTPSServerName:        aghhttp.UserAgent(),
-		EnableEDNSClientSubnet: srvConf.EDNSClientSubnet.Enabled,
-		MaxGoroutines:          srvConf.MaxGoroutines,
-		UseDNS64:               srvConf.UseDNS64,
-		DNS64Prefs:             srvConf.DNS64Prefixes,
+		HTTP3:                     srvConf.ServeHTTP3,
+		Ratelimit:                 int(srvConf.Ratelimit),
+		RatelimitSubnetLenIPv4:    srvConf.RatelimitSubnetLenIPv4,
+		RatelimitSubnetLenIPv6:    srvConf.RatelimitSubnetLenIPv6,
+		RatelimitWhitelist:        srvConf.RatelimitWhitelist,
+		RefuseAny:                 srvConf.RefuseAny,
+		TrustedProxies:            netutil.SliceSubnetSet(trustedPrefixes),
+		CacheMinTTL:               srvConf.CacheMinTTL,
+		CacheMaxTTL:               srvConf.CacheMaxTTL,
+		CacheOptimistic:           srvConf.CacheOptimistic,
+		UpstreamConfig:            srvConf.UpstreamConfig,
+		PrivateRDNSUpstreamConfig: srvConf.PrivateRDNSUpstreamConfig,
+		BeforeRequestHandler:      s,
+		RequestHandler:            s.handleDNSRequest,
+		HTTPSServerName:           aghhttp.UserAgent(),
+		EnableEDNSClientSubnet:    srvConf.EDNSClientSubnet.Enabled,
+		MaxGoroutines:             srvConf.MaxGoroutines,
+		UseDNS64:                  srvConf.UseDNS64,
+		DNS64Prefs:                srvConf.DNS64Prefixes,
+		UsePrivateRDNS:            srvConf.UsePrivateRDNS,
+		PrivateSubnets:            s.privateNets,
+		MessageConstructor:        s,
 	}
 
 	if srvConf.EDNSClientSubnet.UseCustom {
@@ -459,6 +472,26 @@ func (s *Server) prepareIpsetListSettings() (err error) {
 	return s.ipset.init(ipsets)
 }
 
+// loadUpstreams parses upstream DNS servers from the configured file or from
+// the configuration itself.
+func (conf *ServerConfig) loadUpstreams() (upstreams []string, err error) {
+	if conf.UpstreamDNSFileName == "" {
+		return stringutil.FilterOut(conf.UpstreamDNS, IsCommentOrEmpty), nil
+	}
+
+	var data []byte
+	data, err = os.ReadFile(conf.UpstreamDNSFileName)
+	if err != nil {
+		return nil, fmt.Errorf("reading upstream from file: %w", err)
+	}
+
+	upstreams = stringutil.SplitTrimmed(string(data), "\n")
+
+	log.Debug("dnsforward: got %d upstreams in %q", len(upstreams), conf.UpstreamDNSFileName)
+
+	return stringutil.FilterOut(upstreams, IsCommentOrEmpty), nil
+}
+
 // collectListenAddr adds addrPort to addrs.  It also adds its port to
 // unspecPorts if its address is unspecified.
 func collectListenAddr(
@@ -530,8 +563,8 @@ func (m *combinedAddrPortSet) Has(addrPort netip.AddrPort) (ok bool) {
 	return m.ports.Has(addrPort.Port()) && m.addrs.Has(addrPort.Addr())
 }
 
-// filterOut filters out all the upstreams that match um.  It returns all the
-// closing errors joined.
+// filterOutAddrs filters out all the upstreams that match um.  It returns all
+// the closing errors joined.
 func filterOutAddrs(upsConf *proxy.UpstreamConfig, set addrPortSet) (err error) {
 	var errs []error
 	delFunc := func(u upstream.Upstream) (ok bool) {
diff --git a/internal/dnsforward/dns64_test.go b/internal/dnsforward/dns64_test.go
index 75651e06..18bc348f 100644
--- a/internal/dnsforward/dns64_test.go
+++ b/internal/dnsforward/dns64_test.go
@@ -3,7 +3,6 @@ package dnsforward
 import (
 	"net"
 	"testing"
-	"time"
 
 	"github.com/AdguardTeam/AdGuardHome/internal/aghtest"
 	"github.com/AdguardTeam/AdGuardHome/internal/filtering"
@@ -11,6 +10,7 @@ import (
 	"github.com/AdguardTeam/golibs/netutil"
 	"github.com/AdguardTeam/golibs/testutil"
 	"github.com/miekg/dns"
+	"github.com/stretchr/testify/assert"
 	"github.com/stretchr/testify/require"
 )
 
@@ -64,6 +64,8 @@ func newRR(t *testing.T, name string, qtype uint16, ttl uint32, val any) (rr dns
 }
 
 func TestServer_HandleDNSRequest_dns64(t *testing.T) {
+	t.Parallel()
+
 	const (
 		ipv4Domain    = "ipv4.only."
 		ipv6Domain    = "ipv6.only."
@@ -252,32 +254,33 @@ func TestServer_HandleDNSRequest_dns64(t *testing.T) {
 	localUpsHdlr := dns.HandlerFunc(func(w dns.ResponseWriter, m *dns.Msg) {
 		require.Len(pt, m.Question, 1)
 		require.Equal(pt, m.Question[0].Name, ptr64Domain)
-		resp := (&dns.Msg{
-			Answer: []dns.RR{localRR},
-		}).SetReply(m)
+
+		resp := (&dns.Msg{}).SetReply(m)
+		resp.Answer = []dns.RR{localRR}
 
 		require.NoError(t, w.WriteMsg(resp))
 	})
 	localUpsAddr := aghtest.StartLocalhostUpstream(t, localUpsHdlr).String()
 
 	client := &dns.Client{
-		Net:     "tcp",
-		Timeout: 1 * time.Second,
+		Net:     string(proxy.ProtoTCP),
+		Timeout: testTimeout,
 	}
 
 	for _, tc := range testCases {
 		t.Run(tc.name, func(t *testing.T) {
+			t.Parallel()
+
 			upsHdlr := dns.HandlerFunc(func(w dns.ResponseWriter, req *dns.Msg) {
 				q := req.Question[0]
-				require.Contains(pt, tc.upsAns, q.Qtype)
 
+				require.Contains(pt, tc.upsAns, q.Qtype)
 				answer := tc.upsAns[q.Qtype]
 
-				resp := (&dns.Msg{
-					Answer: answer[sectionAnswer],
-					Ns:     answer[sectionAuthority],
-					Extra:  answer[sectionAdditional],
-				}).SetReply(req)
+				resp := (&dns.Msg{}).SetReply(req)
+				resp.Answer = answer[sectionAnswer]
+				resp.Ns = answer[sectionAuthority]
+				resp.Extra = answer[sectionAdditional]
 
 				require.NoError(pt, w.WriteMsg(resp))
 			})
@@ -307,10 +310,54 @@ func TestServer_HandleDNSRequest_dns64(t *testing.T) {
 
 			req := (&dns.Msg{}).SetQuestion(tc.qname, tc.qtype)
 
-			resp, _, excErr := client.Exchange(req, s.dnsProxy.Addr(proxy.ProtoTCP).String())
+			resp, _, excErr := client.Exchange(req, s.proxy().Addr(proxy.ProtoTCP).String())
 			require.NoError(t, excErr)
 
 			require.Equal(t, tc.wantAns, resp.Answer)
 		})
 	}
 }
+
+func TestServer_dns64WithDisabledRDNS(t *testing.T) {
+	t.Parallel()
+
+	// Shouldn't go to upstream at all.
+	panicHdlr := dns.HandlerFunc(func(w dns.ResponseWriter, m *dns.Msg) {
+		panic("not implemented")
+	})
+	upsAddr := aghtest.StartLocalhostUpstream(t, panicHdlr).String()
+	localUpsAddr := aghtest.StartLocalhostUpstream(t, panicHdlr).String()
+
+	s := createTestServer(t, &filtering.Config{
+		BlockingMode: filtering.BlockingModeDefault,
+	}, ServerConfig{
+		UDPListenAddrs: []*net.UDPAddr{{}},
+		TCPListenAddrs: []*net.TCPAddr{{}},
+		UseDNS64:       true,
+		Config: Config{
+			UpstreamMode:     UpstreamModeLoadBalance,
+			EDNSClientSubnet: &EDNSClientSubnet{Enabled: false},
+			UpstreamDNS:      []string{upsAddr},
+		},
+		UsePrivateRDNS:    false,
+		LocalPTRResolvers: []string{localUpsAddr},
+		ServePlainDNS:     true,
+	})
+	startDeferStop(t, s)
+
+	mappedIPv6 := net.ParseIP("64:ff9b::102:304")
+	arpa, err := netutil.IPToReversedAddr(mappedIPv6)
+	require.NoError(t, err)
+
+	req := (&dns.Msg{}).SetQuestion(dns.Fqdn(arpa), dns.TypePTR)
+
+	cli := &dns.Client{
+		Net:     string(proxy.ProtoTCP),
+		Timeout: testTimeout,
+	}
+
+	resp, _, err := cli.Exchange(req, s.proxy().Addr(proxy.ProtoTCP).String())
+	require.NoError(t, err)
+
+	assert.Equal(t, dns.RcodeNameError, resp.Rcode)
+}
diff --git a/internal/dnsforward/dnsforward.go b/internal/dnsforward/dnsforward.go
index 6723a27c..fda29f0a 100644
--- a/internal/dnsforward/dnsforward.go
+++ b/internal/dnsforward/dnsforward.go
@@ -135,12 +135,6 @@ type Server struct {
 	// WHOIS, etc.
 	addrProc client.AddressProcessor
 
-	// localResolvers is a DNS proxy instance used to resolve PTR records for
-	// addresses considered private as per the [privateNets].
-	//
-	// TODO(e.burkov):  Remove once the local resolvers logic moved to dnsproxy.
-	localResolvers *proxy.Proxy
-
 	// sysResolvers used to fetch system resolvers to use by default for private
 	// PTR resolving.
 	sysResolvers SystemResolvers
@@ -158,12 +152,6 @@ type Server struct {
 	// [upstream.Resolver] interface.
 	bootResolvers []*upstream.UpstreamResolver
 
-	// recDetector is a cache for recursive requests.  It is used to detect and
-	// prevent recursive requests only for private upstreams.
-	//
-	// See https://github.com/adguardTeam/adGuardHome/issues/3185#issuecomment-851048135.
-	recDetector *recursionDetector
-
 	// dns64Pref is the NAT64 prefix used for DNS64 response mapping.  The major
 	// part of DNS64 happens inside the [proxy] package, but there still are
 	// some places where response mapping is needed (e.g. DHCP).
@@ -212,14 +200,6 @@ type DNSCreateParams struct {
 	LocalDomain string
 }
 
-const (
-	// recursionTTL is the time recursive request is cached for.
-	recursionTTL = 1 * time.Second
-	// cachedRecurrentReqNum is the maximum number of cached recurrent
-	// requests.
-	cachedRecurrentReqNum = 1000
-)
-
 // NewServer creates a new instance of the dnsforward.Server
 // Note: this function must be called only once
 //
@@ -256,7 +236,6 @@ func NewServer(p DNSCreateParams) (s *Server, err error) {
 		// TODO(e.burkov):  Use some case-insensitive string comparison.
 		localDomainSuffix: strings.ToLower(localDomainSuffix),
 		etcHosts:          etcHosts,
-		recDetector:       newRecursionDetector(recursionTTL, cachedRecurrentReqNum),
 		clientIDCache: cache.New(cache.Config{
 			EnableLRU: true,
 			MaxCount:  defaultClientIDCacheCount,
@@ -366,6 +345,7 @@ func (s *Server) Exchange(ip netip.Addr) (host string, ttl time.Duration, err er
 	s.serverLock.RLock()
 	defer s.serverLock.RUnlock()
 
+	// TODO(e.burkov):  Migrate to [netip.Addr] already.
 	arpa, err := netutil.IPToReversedAddr(ip.AsSlice())
 	if err != nil {
 		return "", 0, fmt.Errorf("reversing ip: %w", err)
@@ -386,25 +366,23 @@ func (s *Server) Exchange(ip netip.Addr) (host string, ttl time.Duration, err er
 	}
 
 	dctx := &proxy.DNSContext{
-		Proto: "udp",
-		Req:   req,
+		Proto:           proxy.ProtoUDP,
+		Req:             req,
+		IsPrivateClient: true,
 	}
 
-	var resolver *proxy.Proxy
 	var errMsg string
 	if s.privateNets.Contains(ip) {
 		if !s.conf.UsePrivateRDNS {
 			return "", 0, nil
 		}
 
-		resolver = s.localResolvers
 		errMsg = "resolving a private address: %w"
-		s.recDetector.add(*req)
+		dctx.RequestedPrivateRDNS = netip.PrefixFrom(ip, ip.BitLen())
 	} else {
-		resolver = s.internalProxy
 		errMsg = "resolving an address: %w"
 	}
-	if err = resolver.Resolve(dctx); err != nil {
+	if err = s.internalProxy.Resolve(dctx); err != nil {
 		return "", 0, fmt.Errorf(errMsg, err)
 	}
 
@@ -473,103 +451,6 @@ func (s *Server) startLocked() error {
 	return err
 }
 
-// prepareLocalResolvers initializes the local upstreams configuration using
-// boot as bootstrap.  It assumes that s.serverLock is locked or s not running.
-func (s *Server) prepareLocalResolvers(
-	boot upstream.Resolver,
-) (uc *proxy.UpstreamConfig, err error) {
-	set, err := s.conf.ourAddrsSet()
-	if err != nil {
-		// Don't wrap the error because it's informative enough as is.
-		return nil, err
-	}
-
-	resolvers := s.conf.LocalPTRResolvers
-	confNeedsFiltering := len(resolvers) > 0
-	if confNeedsFiltering {
-		resolvers = stringutil.FilterOut(resolvers, IsCommentOrEmpty)
-	} else {
-		sysResolvers := slices.DeleteFunc(slices.Clone(s.sysResolvers.Addrs()), set.Has)
-		resolvers = make([]string, 0, len(sysResolvers))
-		for _, r := range sysResolvers {
-			resolvers = append(resolvers, r.String())
-		}
-	}
-
-	log.Debug("dnsforward: upstreams to resolve ptr for local addresses: %v", resolvers)
-
-	uc, err = s.prepareUpstreamConfig(resolvers, nil, &upstream.Options{
-		Bootstrap: boot,
-		Timeout:   defaultLocalTimeout,
-		// TODO(e.burkov): Should we verify server's certificates?
-		PreferIPv6: s.conf.BootstrapPreferIPv6,
-	})
-	if err != nil {
-		return nil, fmt.Errorf("preparing private upstreams: %w", err)
-	}
-
-	if confNeedsFiltering {
-		err = filterOutAddrs(uc, set)
-		if err != nil {
-			return nil, fmt.Errorf("filtering private upstreams: %w", err)
-		}
-	}
-
-	return uc, nil
-}
-
-// LocalResolversError is an error type for errors during local resolvers setup.
-// This is only needed to distinguish these errors from errors returned by
-// creating the proxy.
-type LocalResolversError struct {
-	Err error
-}
-
-// type check
-var _ error = (*LocalResolversError)(nil)
-
-// Error implements the error interface for *LocalResolversError.
-func (err *LocalResolversError) Error() (s string) {
-	return fmt.Sprintf("creating local resolvers: %s", err.Err)
-}
-
-// type check
-var _ errors.Wrapper = (*LocalResolversError)(nil)
-
-// Unwrap implements the [errors.Wrapper] interface for *LocalResolversError.
-func (err *LocalResolversError) Unwrap() error {
-	return err.Err
-}
-
-// setupLocalResolvers initializes and sets the resolvers for local addresses.
-// It assumes s.serverLock is locked or s not running.  It returns the upstream
-// configuration used for private PTR resolving, or nil if it's disabled.  Note,
-// that it's safe to put nil into [proxy.Config.PrivateRDNSUpstreamConfig].
-func (s *Server) setupLocalResolvers(boot upstream.Resolver) (uc *proxy.UpstreamConfig, err error) {
-	if !s.conf.UsePrivateRDNS {
-		// It's safe to put nil into [proxy.Config.PrivateRDNSUpstreamConfig].
-		return nil, nil
-	}
-
-	uc, err = s.prepareLocalResolvers(boot)
-	if err != nil {
-		// Don't wrap the error because it's informative enough as is.
-		return nil, err
-	}
-
-	localResolvers, err := proxy.New(&proxy.Config{
-		UpstreamConfig: uc,
-	})
-	if err != nil {
-		return nil, &LocalResolversError{Err: err}
-	}
-
-	s.localResolvers = localResolvers
-
-	// TODO(e.burkov):  Should we also consider the DNS64 usage?
-	return uc, nil
-}
-
 // Prepare initializes parameters of s using data from conf.  conf must not be
 // nil.
 func (s *Server) Prepare(conf *ServerConfig) (err error) {
@@ -586,7 +467,7 @@ func (s *Server) Prepare(conf *ServerConfig) (err error) {
 
 	s.initDefaultSettings()
 
-	boot, err := s.prepareInternalDNS()
+	err = s.prepareInternalDNS()
 	if err != nil {
 		// Don't wrap the error, because it's informative enough as is.
 		return err
@@ -608,12 +489,6 @@ func (s *Server) Prepare(conf *ServerConfig) (err error) {
 		return fmt.Errorf("preparing access: %w", err)
 	}
 
-	// TODO(e.burkov):  Remove once the local resolvers logic moved to dnsproxy.
-	proxyConfig.PrivateRDNSUpstreamConfig, err = s.setupLocalResolvers(boot)
-	if err != nil {
-		return fmt.Errorf("setting up resolvers: %w", err)
-	}
-
 	proxyConfig.Fallbacks, err = s.setupFallbackDNS()
 	if err != nil {
 		return fmt.Errorf("setting up fallback dns servers: %w", err)
@@ -626,8 +501,6 @@ func (s *Server) Prepare(conf *ServerConfig) (err error) {
 
 	s.dnsProxy = dnsProxy
 
-	s.recDetector.clear()
-
 	s.setupAddrProc()
 
 	s.registerHandlers()
@@ -635,36 +508,127 @@ func (s *Server) Prepare(conf *ServerConfig) (err error) {
 	return nil
 }
 
-// prepareInternalDNS initializes the internal state of s before initializing
-// the primary DNS proxy instance.  It assumes s.serverLock is locked or the
-// Server not running.
-func (s *Server) prepareInternalDNS() (boot upstream.Resolver, err error) {
-	err = s.prepareIpsetListSettings()
+// prepareUpstreamSettings sets upstream DNS server settings.
+func (s *Server) prepareUpstreamSettings(boot upstream.Resolver) (err error) {
+	// Load upstreams either from the file, or from the settings
+	var upstreams []string
+	upstreams, err = s.conf.loadUpstreams()
 	if err != nil {
-		return nil, fmt.Errorf("preparing ipset settings: %w", err)
+		return fmt.Errorf("loading upstreams: %w", err)
 	}
 
-	s.bootstrap, s.bootResolvers, err = s.createBootstrap(s.conf.BootstrapDNS, &upstream.Options{
-		Timeout:      DefaultTimeout,
+	uc, err := newUpstreamConfig(upstreams, defaultDNS, &upstream.Options{
+		Bootstrap:    boot,
+		Timeout:      s.conf.UpstreamTimeout,
 		HTTPVersions: UpstreamHTTPVersions(s.conf.UseHTTP3Upstreams),
+		PreferIPv6:   s.conf.BootstrapPreferIPv6,
+		// Use a customized set of RootCAs, because Go's default mechanism of
+		// loading TLS roots does not always work properly on some routers so we're
+		// loading roots manually and pass it here.
+		//
+		// See [aghtls.SystemRootCAs].
+		//
+		// TODO(a.garipov): Investigate if that's true.
+		RootCAs:      s.conf.TLSv12Roots,
+		CipherSuites: s.conf.TLSCiphers,
 	})
+	if err != nil {
+		return fmt.Errorf("preparing upstream config: %w", err)
+	}
+
+	s.conf.UpstreamConfig = uc
+
+	return nil
+}
+
+// PrivateRDNSError is returned when the private rDNS upstreams are
+// invalid but enabled.
+//
+// TODO(e.burkov):  Consider allowing to use incomplete private rDNS upstreams
+// configuration in proxy when the private rDNS function is enabled.  In theory,
+// proxy supports the case when no upstreams provided to resolve the private
+// request, since it already supports this for DNS64-prefixed PTR requests.
+type PrivateRDNSError struct {
+	err error
+}
+
+// Error implements the [errors.Error] interface.
+func (e *PrivateRDNSError) Error() (s string) {
+	return e.err.Error()
+}
+
+func (e *PrivateRDNSError) Unwrap() (err error) {
+	return e.err
+}
+
+// prepareLocalResolvers initializes the private RDNS upstream configuration
+// according to the server's settings.  It assumes s.serverLock is locked or the
+// Server not running.
+func (s *Server) prepareLocalResolvers() (uc *proxy.UpstreamConfig, err error) {
+	if !s.conf.UsePrivateRDNS {
+		return nil, nil
+	}
+
+	var ownAddrs addrPortSet
+	ownAddrs, err = s.conf.ourAddrsSet()
 	if err != nil {
 		// Don't wrap the error, because it's informative enough as is.
 		return nil, err
 	}
 
+	opts := &upstream.Options{
+		Bootstrap: s.bootstrap,
+		Timeout:   defaultLocalTimeout,
+		// TODO(e.burkov): Should we verify server's certificates?
+		PreferIPv6: s.conf.BootstrapPreferIPv6,
+	}
+
+	addrs := s.conf.LocalPTRResolvers
+	uc, err = newPrivateConfig(addrs, ownAddrs, s.sysResolvers, s.privateNets, opts)
+	if err != nil {
+		return nil, fmt.Errorf("preparing resolvers: %w", err)
+	}
+
+	return uc, nil
+}
+
+// prepareInternalDNS initializes the internal state of s before initializing
+// the primary DNS proxy instance.  It assumes s.serverLock is locked or the
+// Server not running.
+func (s *Server) prepareInternalDNS() (err error) {
+	err = s.prepareIpsetListSettings()
+	if err != nil {
+		return fmt.Errorf("preparing ipset settings: %w", err)
+	}
+
+	bootOpts := &upstream.Options{
+		Timeout:      DefaultTimeout,
+		HTTPVersions: UpstreamHTTPVersions(s.conf.UseHTTP3Upstreams),
+	}
+
+	s.bootstrap, s.bootResolvers, err = newBootstrap(s.conf.BootstrapDNS, s.etcHosts, bootOpts)
+	if err != nil {
+		// Don't wrap the error, because it's informative enough as is.
+		return err
+	}
+
 	err = s.prepareUpstreamSettings(s.bootstrap)
 	if err != nil {
 		// Don't wrap the error, because it's informative enough as is.
-		return s.bootstrap, err
+		return err
+	}
+
+	s.conf.PrivateRDNSUpstreamConfig, err = s.prepareLocalResolvers()
+	if err != nil {
+		return err
 	}
 
 	err = s.prepareInternalProxy()
 	if err != nil {
-		return s.bootstrap, fmt.Errorf("preparing internal proxy: %w", err)
+		return fmt.Errorf("preparing internal proxy: %w", err)
 	}
 
-	return s.bootstrap, nil
+	return nil
 }
 
 // setupFallbackDNS initializes the fallback DNS servers.
@@ -743,10 +707,16 @@ func validateBlockingMode(
 func (s *Server) prepareInternalProxy() (err error) {
 	srvConf := s.conf
 	conf := &proxy.Config{
-		CacheEnabled:   true,
-		CacheSizeBytes: 4096,
-		UpstreamConfig: srvConf.UpstreamConfig,
-		MaxGoroutines:  s.conf.MaxGoroutines,
+		CacheEnabled:              true,
+		CacheSizeBytes:            4096,
+		PrivateRDNSUpstreamConfig: srvConf.PrivateRDNSUpstreamConfig,
+		UpstreamConfig:            srvConf.UpstreamConfig,
+		MaxGoroutines:             srvConf.MaxGoroutines,
+		UseDNS64:                  srvConf.UseDNS64,
+		DNS64Prefs:                srvConf.DNS64Prefixes,
+		UsePrivateRDNS:            srvConf.UsePrivateRDNS,
+		PrivateSubnets:            s.privateNets,
+		MessageConstructor:        s,
 	}
 
 	err = setProxyUpstreamMode(conf, srvConf.UpstreamMode, srvConf.FastestTimeout.Duration)
@@ -782,11 +752,6 @@ func (s *Server) stopLocked() (err error) {
 		}
 	}
 
-	logCloserErr(s.internalProxy.UpstreamConfig, "dnsforward: closing internal resolvers: %s")
-	if s.localResolvers != nil {
-		logCloserErr(s.localResolvers.UpstreamConfig, "dnsforward: closing local resolvers: %s")
-	}
-
 	for _, b := range s.bootResolvers {
 		logCloserErr(b, "dnsforward: closing bootstrap %s: %s", b.Address())
 	}
diff --git a/internal/dnsforward/dnsrewrite.go b/internal/dnsforward/dnsrewrite.go
index 8b9a0fb1..7d9fde72 100644
--- a/internal/dnsforward/dnsrewrite.go
+++ b/internal/dnsforward/dnsrewrite.go
@@ -143,7 +143,7 @@ func (s *Server) filterDNSRewrite(
 	res *filtering.Result,
 	pctx *proxy.DNSContext,
 ) (err error) {
-	resp := s.makeResponse(req)
+	resp := s.replyCompressed(req)
 	dnsrr := res.DNSRewriteResult
 	if dnsrr == nil {
 		return errors.Error("no dns rewrite rule content")
diff --git a/internal/dnsforward/filter.go b/internal/dnsforward/filter.go
index 46599c11..4225e18d 100644
--- a/internal/dnsforward/filter.go
+++ b/internal/dnsforward/filter.go
@@ -1,57 +1,17 @@
 package dnsforward
 
 import (
-	"encoding/binary"
 	"fmt"
 	"net"
 	"slices"
 	"strings"
 
-	"github.com/AdguardTeam/AdGuardHome/internal/aghnet"
 	"github.com/AdguardTeam/AdGuardHome/internal/filtering"
-	"github.com/AdguardTeam/dnsproxy/proxy"
 	"github.com/AdguardTeam/golibs/log"
 	"github.com/AdguardTeam/urlfilter/rules"
 	"github.com/miekg/dns"
 )
 
-// beforeRequestHandler is the handler that is called before any other
-// processing, including logs.  It performs access checks and puts the client
-// ID, if there is one, into the server's cache.
-func (s *Server) beforeRequestHandler(
-	_ *proxy.Proxy,
-	pctx *proxy.DNSContext,
-) (reply bool, err error) {
-	clientID, err := s.clientIDFromDNSContext(pctx)
-	if err != nil {
-		return false, fmt.Errorf("getting clientid: %w", err)
-	}
-
-	blocked, _ := s.IsBlockedClient(pctx.Addr.Addr(), clientID)
-	if blocked {
-		return s.preBlockedResponse(pctx)
-	}
-
-	if len(pctx.Req.Question) == 1 {
-		q := pctx.Req.Question[0]
-		qt := q.Qtype
-		host := aghnet.NormalizeDomain(q.Name)
-		if s.access.isBlockedHost(host, qt) {
-			log.Debug("access: request %s %s is in access blocklist", dns.Type(qt), host)
-
-			return s.preBlockedResponse(pctx)
-		}
-	}
-
-	if clientID != "" {
-		key := [8]byte{}
-		binary.BigEndian.PutUint64(key[:], pctx.RequestID)
-		s.clientIDCache.Set(key[:], []byte(clientID))
-	}
-
-	return true, nil
-}
-
 // clientRequestFilteringSettings looks up client filtering settings using the
 // client's IP address and ID, if any, from dctx.
 func (s *Server) clientRequestFilteringSettings(dctx *dnsContext) (setts *filtering.Settings) {
diff --git a/internal/dnsforward/http.go b/internal/dnsforward/http.go
index 2d446ac9..1a1a7b31 100644
--- a/internal/dnsforward/http.go
+++ b/internal/dnsforward/http.go
@@ -261,55 +261,17 @@ func (req *jsonDNSConfig) checkUpstreamMode() (err error) {
 	}
 }
 
-// checkBootstrap returns an error if any bootstrap address is invalid.
-func (req *jsonDNSConfig) checkBootstrap() (err error) {
-	if req.Bootstraps == nil {
-		return nil
-	}
-
-	var b string
-	defer func() { err = errors.Annotate(err, "checking bootstrap %s: %w", b) }()
-
-	for _, b = range *req.Bootstraps {
-		if b == "" {
-			return errors.Error("empty")
-		}
-
-		var resolver *upstream.UpstreamResolver
-		if resolver, err = upstream.NewUpstreamResolver(b, nil); err != nil {
-			// Don't wrap the error because it's informative enough as is.
-			return err
-		}
-
-		if err = resolver.Close(); err != nil {
-			return fmt.Errorf("closing %s: %w", b, err)
-		}
-	}
-
-	return nil
-}
-
-// checkFallbacks returns an error if any fallback address is invalid.
-func (req *jsonDNSConfig) checkFallbacks() (err error) {
-	if req.Fallbacks == nil {
-		return nil
-	}
-
-	_, err = proxy.ParseUpstreamsConfig(*req.Fallbacks, &upstream.Options{})
-	if err != nil {
-		return fmt.Errorf("fallback servers: %w", err)
-	}
-
-	return nil
-}
-
 // validate returns an error if any field of req is invalid.
 //
 // TODO(s.chzhen):  Parse, don't validate.
-func (req *jsonDNSConfig) validate(privateNets netutil.SubnetSet) (err error) {
+func (req *jsonDNSConfig) validate(
+	ownAddrs addrPortSet,
+	sysResolvers SystemResolvers,
+	privateNets netutil.SubnetSet,
+) (err error) {
 	defer func() { err = errors.Annotate(err, "validating dns config: %w") }()
 
-	err = req.validateUpstreamDNSServers(privateNets)
+	err = req.validateUpstreamDNSServers(ownAddrs, sysResolvers, privateNets)
 	if err != nil {
 		// Don't wrap the error since it's informative enough as is.
 		return err
@@ -342,17 +304,54 @@ func (req *jsonDNSConfig) validate(privateNets netutil.SubnetSet) (err error) {
 	return nil
 }
 
+// checkBootstrap returns an error if any bootstrap address is invalid.
+func (req *jsonDNSConfig) checkBootstrap() (err error) {
+	if req.Bootstraps == nil {
+		return nil
+	}
+
+	var b string
+	defer func() { err = errors.Annotate(err, "checking bootstrap %s: %w", b) }()
+
+	for _, b = range *req.Bootstraps {
+		if b == "" {
+			return errors.Error("empty")
+		}
+
+		var resolver *upstream.UpstreamResolver
+		if resolver, err = upstream.NewUpstreamResolver(b, nil); err != nil {
+			// Don't wrap the error because it's informative enough as is.
+			return err
+		}
+
+		if err = resolver.Close(); err != nil {
+			return fmt.Errorf("closing %s: %w", b, err)
+		}
+	}
+
+	return nil
+}
+
 // validateUpstreamDNSServers returns an error if any field of req is invalid.
-func (req *jsonDNSConfig) validateUpstreamDNSServers(privateNets netutil.SubnetSet) (err error) {
+func (req *jsonDNSConfig) validateUpstreamDNSServers(
+	ownAddrs addrPortSet,
+	sysResolvers SystemResolvers,
+	privateNets netutil.SubnetSet,
+) (err error) {
+	var uc *proxy.UpstreamConfig
+	opts := &upstream.Options{}
+
 	if req.Upstreams != nil {
-		_, err = proxy.ParseUpstreamsConfig(*req.Upstreams, &upstream.Options{})
+		uc, err = proxy.ParseUpstreamsConfig(*req.Upstreams, opts)
+		err = errors.WithDeferred(err, uc.Close())
 		if err != nil {
 			return fmt.Errorf("upstream servers: %w", err)
 		}
 	}
 
-	if req.LocalPTRUpstreams != nil {
-		err = ValidateUpstreamsPrivate(*req.LocalPTRUpstreams, privateNets)
+	if addrs := req.LocalPTRUpstreams; addrs != nil {
+		uc, err = newPrivateConfig(*addrs, ownAddrs, sysResolvers, privateNets, opts)
+		err = errors.WithDeferred(err, uc.Close())
 		if err != nil {
 			return fmt.Errorf("private upstream servers: %w", err)
 		}
@@ -364,10 +363,12 @@ func (req *jsonDNSConfig) validateUpstreamDNSServers(privateNets netutil.SubnetS
 		return err
 	}
 
-	err = req.checkFallbacks()
-	if err != nil {
-		// Don't wrap the error since it's informative enough as is.
-		return err
+	if req.Fallbacks != nil {
+		uc, err = proxy.ParseUpstreamsConfig(*req.Fallbacks, opts)
+		err = errors.WithDeferred(err, uc.Close())
+		if err != nil {
+			return fmt.Errorf("fallback servers: %w", err)
+		}
 	}
 
 	return nil
@@ -436,7 +437,16 @@ func (s *Server) handleSetConfig(w http.ResponseWriter, r *http.Request) {
 		return
 	}
 
-	err = req.validate(s.privateNets)
+	// TODO(e.burkov):  Consider prebuilding this set on startup.
+	ourAddrs, err := s.conf.ourAddrsSet()
+	if err != nil {
+		// TODO(e.burkov):  !! Put into openapi
+		aghhttp.Error(r, w, http.StatusInternalServerError, "getting our addresses: %s", err)
+
+		return
+	}
+
+	err = req.validate(ourAddrs, s.sysResolvers, s.privateNets)
 	if err != nil {
 		aghhttp.Error(r, w, http.StatusBadRequest, "%s", err)
 
@@ -587,7 +597,7 @@ func (s *Server) handleTestUpstreamDNS(w http.ResponseWriter, r *http.Request) {
 	}
 
 	var boots []*upstream.UpstreamResolver
-	opts.Bootstrap, boots, err = s.createBootstrap(req.BootstrapDNS, opts)
+	opts.Bootstrap, boots, err = newBootstrap(req.BootstrapDNS, s.etcHosts, opts)
 	if err != nil {
 		aghhttp.Error(r, w, http.StatusBadRequest, "Failed to parse bootstrap servers: %s", err)
 
diff --git a/internal/dnsforward/http_test.go b/internal/dnsforward/http_test.go
index b0145b23..56daa4bf 100644
--- a/internal/dnsforward/http_test.go
+++ b/internal/dnsforward/http_test.go
@@ -245,9 +245,8 @@ func TestDNSForwardHTTP_handleSetConfig(t *testing.T) {
 		wantSet: "",
 	}, {
 		name: "local_ptr_upstreams_bad",
-		wantSet: `validating dns config: ` +
-			`private upstream servers: checking domain-specific upstreams: ` +
-			`bad arpa domain name "non.arpa.": not a reversed ip network`,
+		wantSet: `validating dns config: private upstream servers: ` +
+			`bad arpa domain name "non.arpa": not a reversed ip network`,
 	}, {
 		name:    "local_ptr_upstreams_null",
 		wantSet: "",
@@ -318,58 +317,6 @@ func TestIsCommentOrEmpty(t *testing.T) {
 	}
 }
 
-func TestValidateUpstreamsPrivate(t *testing.T) {
-	ss := netutil.SubnetSetFunc(netutil.IsLocallyServed)
-
-	testCases := []struct {
-		name    string
-		wantErr string
-		u       string
-	}{{
-		name:    "success_address",
-		wantErr: ``,
-		u:       "[/1.0.0.127.in-addr.arpa/]#",
-	}, {
-		name:    "success_subnet",
-		wantErr: ``,
-		u:       "[/127.in-addr.arpa/]#",
-	}, {
-		name: "not_arpa_subnet",
-		wantErr: `checking domain-specific upstreams: ` +
-			`bad arpa domain name "hello.world.": not a reversed ip network`,
-		u: "[/hello.world/]#",
-	}, {
-		name: "non-private_arpa_address",
-		wantErr: `checking domain-specific upstreams: ` +
-			`arpa domain "1.2.3.4.in-addr.arpa." should point to a locally-served network`,
-		u: "[/1.2.3.4.in-addr.arpa/]#",
-	}, {
-		name: "non-private_arpa_subnet",
-		wantErr: `checking domain-specific upstreams: ` +
-			`arpa domain "128.in-addr.arpa." should point to a locally-served network`,
-		u: "[/128.in-addr.arpa/]#",
-	}, {
-		name: "several_bad",
-		wantErr: `checking domain-specific upstreams: ` +
-			`arpa domain "1.2.3.4.in-addr.arpa." should point to a locally-served network` + "\n" +
-			`bad arpa domain name "non.arpa.": not a reversed ip network`,
-		u: "[/non.arpa/1.2.3.4.in-addr.arpa/127.in-addr.arpa/]#",
-	}, {
-		name:    "partial_good",
-		wantErr: "",
-		u:       "[/a.1.2.3.10.in-addr.arpa/a.10.in-addr.arpa/]#",
-	}}
-
-	for _, tc := range testCases {
-		set := []string{"192.168.0.1", tc.u}
-
-		t.Run(tc.name, func(t *testing.T) {
-			err := ValidateUpstreamsPrivate(set, ss)
-			testutil.AssertErrorMsg(t, tc.wantErr, err)
-		})
-	}
-}
-
 func newLocalUpstreamListener(t *testing.T, port uint16, handler dns.Handler) (real netip.AddrPort) {
 	t.Helper()
 
diff --git a/internal/dnsforward/msg.go b/internal/dnsforward/msg.go
index 10dceb11..e716dcdd 100644
--- a/internal/dnsforward/msg.go
+++ b/internal/dnsforward/msg.go
@@ -11,17 +11,21 @@ import (
 	"github.com/miekg/dns"
 )
 
-// makeResponse creates a DNS response by req and sets necessary flags.  It also
-// guarantees that req.Question will be not empty.
-func (s *Server) makeResponse(req *dns.Msg) (resp *dns.Msg) {
-	resp = &dns.Msg{
-		MsgHdr: dns.MsgHdr{
-			RecursionAvailable: true,
-		},
-		Compress: true,
-	}
+// TODO(e.burkov):  Name all the methods by a [proxy.MessageConstructor]
+// template.  Also extract all the methods to a separate entity.
 
-	resp.SetReply(req)
+// reply creates a DNS response for req.
+func (*Server) reply(req *dns.Msg, code int) (resp *dns.Msg) {
+	resp = (&dns.Msg{}).SetRcode(req, code)
+	resp.RecursionAvailable = true
+
+	return resp
+}
+
+// replyCompressed creates a DNS response for req and sets the compress flag.
+func (s *Server) replyCompressed(req *dns.Msg) (resp *dns.Msg) {
+	resp = s.reply(req, dns.RcodeSuccess)
+	resp.Compress = true
 
 	return resp
 }
@@ -51,7 +55,7 @@ func (s *Server) genDNSFilterMessage(
 	if qt != dns.TypeA && qt != dns.TypeAAAA {
 		m, _, _ := s.dnsFilter.BlockingMode()
 		if m == filtering.BlockingModeNullIP {
-			return s.makeResponse(req)
+			return s.replyCompressed(req)
 		}
 
 		return s.newMsgNODATA(req)
@@ -75,7 +79,7 @@ func (s *Server) genDNSFilterMessage(
 // getCNAMEWithIPs generates a filtered response to req for with CNAME record
 // and provided ips.
 func (s *Server) getCNAMEWithIPs(req *dns.Msg, ips []netip.Addr, cname string) (resp *dns.Msg) {
-	resp = s.makeResponse(req)
+	resp = s.replyCompressed(req)
 
 	originalName := req.Question[0].Name
 
@@ -121,13 +125,13 @@ func (s *Server) genForBlockingMode(req *dns.Msg, ips []netip.Addr) (resp *dns.M
 	case filtering.BlockingModeNullIP:
 		return s.makeResponseNullIP(req)
 	case filtering.BlockingModeNXDOMAIN:
-		return s.genNXDomain(req)
+		return s.NewMsgNXDOMAIN(req)
 	case filtering.BlockingModeREFUSED:
 		return s.makeResponseREFUSED(req)
 	default:
 		log.Error("dnsforward: invalid blocking mode %q", mode)
 
-		return s.makeResponse(req)
+		return s.replyCompressed(req)
 	}
 }
 
@@ -148,25 +152,18 @@ func (s *Server) makeResponseCustomIP(
 		// genDNSFilterMessage.
 		log.Error("dnsforward: invalid msg type %s for custom IP blocking mode", dns.Type(qt))
 
-		return s.makeResponse(req)
+		return s.replyCompressed(req)
 	}
 }
 
-func (s *Server) genServerFailure(request *dns.Msg) *dns.Msg {
-	resp := dns.Msg{}
-	resp.SetRcode(request, dns.RcodeServerFailure)
-	resp.RecursionAvailable = true
-	return &resp
-}
-
 func (s *Server) genARecord(request *dns.Msg, ip netip.Addr) *dns.Msg {
-	resp := s.makeResponse(request)
+	resp := s.replyCompressed(request)
 	resp.Answer = append(resp.Answer, s.genAnswerA(request, ip))
 	return resp
 }
 
 func (s *Server) genAAAARecord(request *dns.Msg, ip netip.Addr) *dns.Msg {
-	resp := s.makeResponse(request)
+	resp := s.replyCompressed(request)
 	resp.Answer = append(resp.Answer, s.genAnswerAAAA(request, ip))
 	return resp
 }
@@ -252,7 +249,7 @@ func (s *Server) genResponseWithIPs(req *dns.Msg, ips []netip.Addr) (resp *dns.M
 		// Go on and return an empty response.
 	}
 
-	resp = s.makeResponse(req)
+	resp = s.replyCompressed(req)
 	resp.Answer = ans
 
 	return resp
@@ -288,7 +285,7 @@ func (s *Server) makeResponseNullIP(req *dns.Msg) (resp *dns.Msg) {
 	case dns.TypeAAAA:
 		resp = s.genResponseWithIPs(req, []netip.Addr{netip.IPv6Unspecified()})
 	default:
-		resp = s.makeResponse(req)
+		resp = s.replyCompressed(req)
 	}
 
 	return resp
@@ -298,7 +295,7 @@ func (s *Server) genBlockedHost(request *dns.Msg, newAddr string, d *proxy.DNSCo
 	if newAddr == "" {
 		log.Info("dnsforward: block host is not specified")
 
-		return s.genServerFailure(request)
+		return s.NewMsgSERVFAIL(request)
 	}
 
 	ip, err := netip.ParseAddr(newAddr)
@@ -321,17 +318,17 @@ func (s *Server) genBlockedHost(request *dns.Msg, newAddr string, d *proxy.DNSCo
 	if prx == nil {
 		log.Debug("dnsforward: %s", srvClosedErr)
 
-		return s.genServerFailure(request)
+		return s.NewMsgSERVFAIL(request)
 	}
 
 	err = prx.Resolve(newContext)
 	if err != nil {
 		log.Info("dnsforward: looking up replacement host %q: %s", newAddr, err)
 
-		return s.genServerFailure(request)
+		return s.NewMsgSERVFAIL(request)
 	}
 
-	resp := s.makeResponse(request)
+	resp := s.replyCompressed(request)
 	if newContext.Res != nil {
 		for _, answer := range newContext.Res.Answer {
 			answer.Header().Name = request.Question[0].Name
@@ -342,47 +339,21 @@ func (s *Server) genBlockedHost(request *dns.Msg, newAddr string, d *proxy.DNSCo
 	return resp
 }
 
-// preBlockedResponse returns a protocol-appropriate response for a request that
-// was blocked by access settings.
-func (s *Server) preBlockedResponse(pctx *proxy.DNSContext) (reply bool, err error) {
-	if pctx.Proto == proxy.ProtoUDP || pctx.Proto == proxy.ProtoDNSCrypt {
-		// Return nil so that dnsproxy drops the connection and thus
-		// prevent DNS amplification attacks.
-		return false, nil
-	}
-
-	pctx.Res = s.makeResponseREFUSED(pctx.Req)
-
-	return true, nil
-}
-
 // Create REFUSED DNS response
-func (s *Server) makeResponseREFUSED(request *dns.Msg) *dns.Msg {
-	resp := dns.Msg{}
-	resp.SetRcode(request, dns.RcodeRefused)
-	resp.RecursionAvailable = true
-	return &resp
+func (s *Server) makeResponseREFUSED(req *dns.Msg) *dns.Msg {
+	return s.reply(req, dns.RcodeRefused)
 }
 
 // newMsgNODATA returns a properly initialized NODATA response.
 //
 // See https://www.rfc-editor.org/rfc/rfc2308#section-2.2.
 func (s *Server) newMsgNODATA(req *dns.Msg) (resp *dns.Msg) {
-	resp = (&dns.Msg{}).SetRcode(req, dns.RcodeSuccess)
-	resp.RecursionAvailable = true
+	resp = s.reply(req, dns.RcodeSuccess)
 	resp.Ns = s.genSOA(req)
 
 	return resp
 }
 
-func (s *Server) genNXDomain(request *dns.Msg) *dns.Msg {
-	resp := dns.Msg{}
-	resp.SetRcode(request, dns.RcodeNameError)
-	resp.RecursionAvailable = true
-	resp.Ns = s.genSOA(request)
-	return &resp
-}
-
 func (s *Server) genSOA(request *dns.Msg) []dns.RR {
 	zone := ""
 	if len(request.Question) > 0 {
@@ -414,5 +385,43 @@ func (s *Server) genSOA(request *dns.Msg) []dns.RR {
 	if len(zone) > 0 && zone[0] != '.' {
 		soa.Mbox += zone
 	}
+
 	return []dns.RR{&soa}
 }
+
+// type check
+var _ proxy.MessageConstructor = (*Server)(nil)
+
+// NewMsgNXDOMAIN implements the [proxy.MessageConstructor] interface for
+// *Server.
+func (s *Server) NewMsgNXDOMAIN(req *dns.Msg) (resp *dns.Msg) {
+	resp = s.reply(req, dns.RcodeNameError)
+	resp.Ns = s.genSOA(req)
+
+	return resp
+}
+
+// NewMsgSERVFAIL implements the [proxy.MessageConstructor] interface for
+// *Server.
+func (s *Server) NewMsgSERVFAIL(req *dns.Msg) (resp *dns.Msg) {
+	return s.reply(req, dns.RcodeServerFailure)
+}
+
+// NewMsgNOTIMPLEMENTED implements the [proxy.MessageConstructor] interface for
+// *Server.
+func (s *Server) NewMsgNOTIMPLEMENTED(req *dns.Msg) (resp *dns.Msg) {
+	resp = s.reply(req, dns.RcodeNotImplemented)
+
+	// Most of the Internet and especially the inner core has an MTU of at least
+	// 1500 octets.  Maximum DNS/UDP payload size for IPv6 on MTU 1500 ethernet
+	// is 1452 (1500 minus 40 (IPv6 header size) minus 8 (UDP header size)).
+	//
+	// See appendix A of https://datatracker.ietf.org/doc/draft-ietf-dnsop-avoid-fragmentation/17.
+	const maxUDPPayload = 1452
+
+	// NOTIMPLEMENTED without EDNS is treated as 'we don't support EDNS', so
+	// explicitly set it.
+	resp.SetEdns0(maxUDPPayload, false)
+
+	return resp
+}
diff --git a/internal/dnsforward/process.go b/internal/dnsforward/process.go
index 8cfe923a..4f8ec63a 100644
--- a/internal/dnsforward/process.go
+++ b/internal/dnsforward/process.go
@@ -1,20 +1,17 @@
 package dnsforward
 
 import (
+	"cmp"
 	"encoding/binary"
 	"net"
 	"net/netip"
-	"strconv"
 	"strings"
 	"time"
 
 	"github.com/AdguardTeam/AdGuardHome/internal/filtering"
 	"github.com/AdguardTeam/dnsproxy/proxy"
-	"github.com/AdguardTeam/dnsproxy/upstream"
-	"github.com/AdguardTeam/golibs/errors"
 	"github.com/AdguardTeam/golibs/log"
 	"github.com/AdguardTeam/golibs/netutil"
-	"github.com/AdguardTeam/golibs/stringutil"
 	"github.com/miekg/dns"
 )
 
@@ -34,11 +31,6 @@ type dnsContext struct {
 	// response is modified by filters.
 	origResp *dns.Msg
 
-	// unreversedReqIP stores an IP address obtained from a PTR request if it
-	// was parsed successfully and belongs to one of the locally served IP
-	// ranges.
-	unreversedReqIP netip.Addr
-
 	// err is the error returned from a processing function.
 	err error
 
@@ -63,10 +55,6 @@ type dnsContext struct {
 	// responseAD shows if the response had the AD bit set.
 	responseAD bool
 
-	// isLocalClient shows if client's IP address is from locally served
-	// network.
-	isLocalClient bool
-
 	// isDHCPHost is true if the request for a local domain name and the DHCP is
 	// available for this request.
 	isDHCPHost bool
@@ -109,15 +97,11 @@ func (s *Server) handleDNSRequest(_ *proxy.Proxy, pctx *proxy.DNSContext) error
 	// (*proxy.Proxy).handleDNSRequest method performs it before calling the
 	// appropriate handler.
 	mods := []modProcessFunc{
-		s.processRecursion,
 		s.processInitial,
 		s.processDDRQuery,
-		s.processDetermineLocal,
 		s.processDHCPHosts,
-		s.processRestrictLocal,
 		s.processDHCPAddrs,
 		s.processFilteringBeforeRequest,
-		s.processLocalPTR,
 		s.processUpstream,
 		s.processFilteringAfterResponse,
 		s.ipset.process,
@@ -145,24 +129,6 @@ func (s *Server) handleDNSRequest(_ *proxy.Proxy, pctx *proxy.DNSContext) error
 	return nil
 }
 
-// processRecursion checks the incoming request and halts its handling by
-// answering NXDOMAIN if s has tried to resolve it recently.
-func (s *Server) processRecursion(dctx *dnsContext) (rc resultCode) {
-	log.Debug("dnsforward: started processing recursion")
-	defer log.Debug("dnsforward: finished processing recursion")
-
-	pctx := dctx.proxyCtx
-
-	if msg := pctx.Req; msg != nil && s.recDetector.check(*msg) {
-		log.Debug("dnsforward: recursion detected resolving %q", msg.Question[0].Name)
-		pctx.Res = s.genNXDomain(pctx.Req)
-
-		return resultCodeFinish
-	}
-
-	return resultCodeSuccess
-}
-
 // mozillaFQDN is the domain used to signal the Firefox browser to not use its
 // own DoH server.
 //
@@ -199,14 +165,14 @@ func (s *Server) processInitial(dctx *dnsContext) (rc resultCode) {
 	}
 
 	if (qt == dns.TypeA || qt == dns.TypeAAAA) && q.Name == mozillaFQDN {
-		pctx.Res = s.genNXDomain(pctx.Req)
+		pctx.Res = s.NewMsgNXDOMAIN(pctx.Req)
 
 		return resultCodeFinish
 	}
 
 	if q.Name == healthcheckFQDN {
 		// Generate a NODATA negative response to make nslookup exit with 0.
-		pctx.Res = s.makeResponse(pctx.Req)
+		pctx.Res = s.replyCompressed(pctx.Req)
 
 		return resultCodeFinish
 	}
@@ -272,7 +238,7 @@ func (s *Server) processDDRQuery(dctx *dnsContext) (rc resultCode) {
 //
 // [draft standard]: https://www.ietf.org/archive/id/draft-ietf-add-ddr-10.html.
 func (s *Server) makeDDRResponse(req *dns.Msg) (resp *dns.Msg) {
-	resp = s.makeResponse(req)
+	resp = s.replyCompressed(req)
 	if req.Question[0].Qtype != dns.TypeSVCB {
 		return resp
 	}
@@ -339,19 +305,6 @@ func (s *Server) makeDDRResponse(req *dns.Msg) (resp *dns.Msg) {
 	return resp
 }
 
-// processDetermineLocal determines if the client's IP address is from locally
-// served network and saves the result into the context.
-func (s *Server) processDetermineLocal(dctx *dnsContext) (rc resultCode) {
-	log.Debug("dnsforward: started processing local detection")
-	defer log.Debug("dnsforward: finished processing local detection")
-
-	rc = resultCodeSuccess
-
-	dctx.isLocalClient = s.privateNets.Contains(dctx.proxyCtx.Addr.Addr())
-
-	return rc
-}
-
 // processDHCPHosts respond to A requests if the target hostname is known to
 // the server.  It responds with a mapped IP address if the DNS64 is enabled and
 // the request is for AAAA.
@@ -370,9 +323,9 @@ func (s *Server) processDHCPHosts(dctx *dnsContext) (rc resultCode) {
 		return resultCodeSuccess
 	}
 
-	if !dctx.isLocalClient {
+	if !pctx.IsPrivateClient {
 		log.Debug("dnsforward: %q requests for dhcp host %q", pctx.Addr, dhcpHost)
-		pctx.Res = s.genNXDomain(req)
+		pctx.Res = s.NewMsgNXDOMAIN(req)
 
 		// Do not even put into query log.
 		return resultCodeFinish
@@ -389,7 +342,7 @@ func (s *Server) processDHCPHosts(dctx *dnsContext) (rc resultCode) {
 
 	log.Debug("dnsforward: dhcp record for %q is %s", dhcpHost, ip)
 
-	resp := s.makeResponse(req)
+	resp := s.replyCompressed(req)
 	switch q.Qtype {
 	case dns.TypeA:
 		a := &dns.A{
@@ -416,141 +369,6 @@ func (s *Server) processDHCPHosts(dctx *dnsContext) (rc resultCode) {
 	return resultCodeSuccess
 }
 
-// indexFirstV4Label returns the index at which the reversed IPv4 address
-// starts, assuming the domain is pre-validated ARPA domain having in-addr and
-// arpa labels removed.
-func indexFirstV4Label(domain string) (idx int) {
-	idx = len(domain)
-	for labelsNum := 0; labelsNum < net.IPv4len && idx > 0; labelsNum++ {
-		curIdx := strings.LastIndexByte(domain[:idx-1], '.') + 1
-		_, parseErr := strconv.ParseUint(domain[curIdx:idx-1], 10, 8)
-		if parseErr != nil {
-			return idx
-		}
-
-		idx = curIdx
-	}
-
-	return idx
-}
-
-// indexFirstV6Label returns the index at which the reversed IPv6 address
-// starts, assuming the domain is pre-validated ARPA domain having ip6 and arpa
-// labels removed.
-func indexFirstV6Label(domain string) (idx int) {
-	idx = len(domain)
-	for labelsNum := 0; labelsNum < net.IPv6len*2 && idx > 0; labelsNum++ {
-		curIdx := idx - len("a.")
-		if curIdx > 1 && domain[curIdx-1] != '.' {
-			return idx
-		}
-
-		nibble := domain[curIdx]
-		if (nibble < '0' || nibble > '9') && (nibble < 'a' || nibble > 'f') {
-			return idx
-		}
-
-		idx = curIdx
-	}
-
-	return idx
-}
-
-// extractARPASubnet tries to convert a reversed ARPA address being a part of
-// domain to an IP network.  domain must be an FQDN.
-//
-// TODO(e.burkov):  Move to golibs.
-func extractARPASubnet(domain string) (pref netip.Prefix, err error) {
-	err = netutil.ValidateDomainName(strings.TrimSuffix(domain, "."))
-	if err != nil {
-		// Don't wrap the error since it's informative enough as is.
-		return netip.Prefix{}, err
-	}
-
-	const (
-		v4Suffix = "in-addr.arpa."
-		v6Suffix = "ip6.arpa."
-	)
-
-	domain = strings.ToLower(domain)
-
-	var idx int
-	switch {
-	case strings.HasSuffix(domain, v4Suffix):
-		idx = indexFirstV4Label(domain[:len(domain)-len(v4Suffix)])
-	case strings.HasSuffix(domain, v6Suffix):
-		idx = indexFirstV6Label(domain[:len(domain)-len(v6Suffix)])
-	default:
-		return netip.Prefix{}, &netutil.AddrError{
-			Err:  netutil.ErrNotAReversedSubnet,
-			Kind: netutil.AddrKindARPA,
-			Addr: domain,
-		}
-	}
-
-	return netutil.PrefixFromReversedAddr(domain[idx:])
-}
-
-// processRestrictLocal responds with NXDOMAIN to PTR requests for IP addresses
-// in locally served network from external clients.
-func (s *Server) processRestrictLocal(dctx *dnsContext) (rc resultCode) {
-	log.Debug("dnsforward: started processing local restriction")
-	defer log.Debug("dnsforward: finished processing local restriction")
-
-	pctx := dctx.proxyCtx
-	req := pctx.Req
-	q := req.Question[0]
-	if q.Qtype != dns.TypePTR {
-		// No need for restriction.
-		return resultCodeSuccess
-	}
-
-	subnet, err := extractARPASubnet(q.Name)
-	if err != nil {
-		if errors.Is(err, netutil.ErrNotAReversedSubnet) {
-			log.Debug("dnsforward: request is not for arpa domain")
-
-			return resultCodeSuccess
-		}
-
-		log.Debug("dnsforward: parsing reversed addr: %s", err)
-
-		return resultCodeError
-	}
-
-	// Restrict an access to local addresses for external clients.  We also
-	// assume that all the DHCP leases we give are locally served or at least
-	// shouldn't be accessible externally.
-	subnetAddr := subnet.Addr()
-	if !s.privateNets.Contains(subnetAddr) {
-		return resultCodeSuccess
-	}
-
-	log.Debug("dnsforward: addr %s is from locally served network", subnetAddr)
-
-	if !dctx.isLocalClient {
-		log.Debug("dnsforward: %q requests an internal ip", pctx.Addr)
-		pctx.Res = s.genNXDomain(req)
-
-		// Do not even put into query log.
-		return resultCodeFinish
-	}
-
-	// Do not perform unreversing ever again.
-	dctx.unreversedReqIP = subnetAddr
-
-	// There is no need to filter request from external addresses since this
-	// code is only executed when the request is for locally served ARPA
-	// hostname so disable redundant filters.
-	dctx.setts.ParentalEnabled = false
-	dctx.setts.SafeBrowsingEnabled = false
-	dctx.setts.SafeSearchEnabled = false
-	dctx.setts.ServicesRules = nil
-
-	// Nothing to restrict.
-	return resultCodeSuccess
-}
-
 // processDHCPAddrs responds to PTR requests if the target IP is leased by the
 // DHCP server.
 func (s *Server) processDHCPAddrs(dctx *dnsContext) (rc resultCode) {
@@ -562,20 +380,21 @@ func (s *Server) processDHCPAddrs(dctx *dnsContext) (rc resultCode) {
 		return resultCodeSuccess
 	}
 
-	ipAddr := dctx.unreversedReqIP
-	if ipAddr == (netip.Addr{}) {
+	pref := pctx.RequestedPrivateRDNS
+	if pref == (netip.Prefix{}) {
 		return resultCodeSuccess
 	}
 
-	host := s.dhcpServer.HostByIP(ipAddr)
+	addr := pref.Addr()
+	host := s.dhcpServer.HostByIP(addr)
 	if host == "" {
 		return resultCodeSuccess
 	}
 
-	log.Debug("dnsforward: dhcp client %s is %q", ipAddr, host)
+	log.Debug("dnsforward: dhcp client %s is %q", addr, host)
 
 	req := pctx.Req
-	resp := s.makeResponse(req)
+	resp := s.replyCompressed(req)
 	ptr := &dns.PTR{
 		Hdr: dns.RR_Header{
 			Name:   req.Question[0].Name,
@@ -593,62 +412,20 @@ func (s *Server) processDHCPAddrs(dctx *dnsContext) (rc resultCode) {
 	return resultCodeSuccess
 }
 
-// processLocalPTR responds to PTR requests if the target IP is detected to be
-// inside the local network and the query was not answered from DHCP.
-func (s *Server) processLocalPTR(dctx *dnsContext) (rc resultCode) {
-	log.Debug("dnsforward: started processing local ptr")
-	defer log.Debug("dnsforward: finished processing local ptr")
-
-	pctx := dctx.proxyCtx
-	if pctx.Res != nil {
-		return resultCodeSuccess
-	}
-
-	ip := dctx.unreversedReqIP
-	if ip == (netip.Addr{}) {
-		return resultCodeSuccess
-	}
-
-	s.serverLock.RLock()
-	defer s.serverLock.RUnlock()
-
-	if s.conf.UsePrivateRDNS {
-		s.recDetector.add(*pctx.Req)
-		if err := s.localResolvers.Resolve(pctx); err != nil {
-			log.Debug("dnsforward: resolving private address: %s", err)
-
-			// Generate the server failure if the private upstream configuration
-			// is empty.
-			//
-			// This is a crutch, see TODO at [Server.localResolvers].
-			if errors.Is(err, upstream.ErrNoUpstreams) {
-				pctx.Res = s.genServerFailure(pctx.Req)
-
-				// Do not even put into query log.
-				return resultCodeFinish
-			}
-
-			dctx.err = err
-
-			return resultCodeError
-		}
-	}
-
-	if pctx.Res == nil {
-		pctx.Res = s.genNXDomain(pctx.Req)
-
-		// Do not even put into query log.
-		return resultCodeFinish
-	}
-
-	return resultCodeSuccess
-}
-
 // Apply filtering logic
 func (s *Server) processFilteringBeforeRequest(dctx *dnsContext) (rc resultCode) {
 	log.Debug("dnsforward: started processing filtering before req")
 	defer log.Debug("dnsforward: finished processing filtering before req")
 
+	if dctx.proxyCtx.RequestedPrivateRDNS != (netip.Prefix{}) {
+		// There is no need to filter request for locally served ARPA hostname
+		// so disable redundant filters.
+		dctx.setts.ParentalEnabled = false
+		dctx.setts.SafeBrowsingEnabled = false
+		dctx.setts.SafeSearchEnabled = false
+		dctx.setts.ServicesRules = nil
+	}
+
 	if dctx.proxyCtx.Res != nil {
 		// Go on since the response is already set.
 		return resultCodeSuccess
@@ -695,7 +472,7 @@ func (s *Server) processUpstream(dctx *dnsContext) (rc resultCode) {
 		// local domain name if there is one.
 		name := req.Question[0].Name
 		log.Debug("dnsforward: dhcp client hostname %q was not filtered", name[:len(name)-1])
-		pctx.Res = s.genNXDomain(req)
+		pctx.Res = s.NewMsgNXDOMAIN(req)
 
 		return resultCodeFinish
 	}
@@ -712,21 +489,7 @@ func (s *Server) processUpstream(dctx *dnsContext) (rc resultCode) {
 		return resultCodeError
 	}
 
-	if err := prx.Resolve(pctx); err != nil {
-		if errors.Is(err, upstream.ErrNoUpstreams) {
-			// Do not even put into querylog.  Currently this happens either
-			// when the private resolvers enabled and the request is DNS64 PTR,
-			// or when the client isn't considered local by prx.
-			//
-			// TODO(e.burkov):  Make proxy detect local client the same way as
-			// AGH does.
-			pctx.Res = s.genNXDomain(req)
-
-			return resultCodeFinish
-		}
-
-		dctx.err = err
-
+	if dctx.err = prx.Resolve(pctx); dctx.err != nil {
 		return resultCodeError
 	}
 
@@ -810,7 +573,7 @@ func (s *Server) setCustomUpstream(pctx *proxy.DNSContext, clientID string) {
 	}
 
 	// Use the ClientID first, since it has a higher priority.
-	id := stringutil.Coalesce(clientID, pctx.Addr.Addr().String())
+	id := cmp.Or(clientID, pctx.Addr.Addr().String())
 	upsConf, err := s.conf.ClientsContainer.UpstreamConfigByID(id, s.bootstrap)
 	if err != nil {
 		log.Error("dnsforward: getting custom upstreams for client %s: %s", id, err)
diff --git a/internal/dnsforward/process_internal_test.go b/internal/dnsforward/process_internal_test.go
index 0a6441bf..e47027a5 100644
--- a/internal/dnsforward/process_internal_test.go
+++ b/internal/dnsforward/process_internal_test.go
@@ -9,6 +9,7 @@ import (
 	"github.com/AdguardTeam/AdGuardHome/internal/aghtest"
 	"github.com/AdguardTeam/AdGuardHome/internal/filtering"
 	"github.com/AdguardTeam/dnsproxy/proxy"
+	"github.com/AdguardTeam/dnsproxy/upstream"
 	"github.com/AdguardTeam/golibs/netutil"
 	"github.com/AdguardTeam/golibs/testutil"
 	"github.com/AdguardTeam/urlfilter/rules"
@@ -375,44 +376,6 @@ func createTestDNSFilter(t *testing.T) (f *filtering.DNSFilter) {
 	return f
 }
 
-func TestServer_ProcessDetermineLocal(t *testing.T) {
-	s := &Server{
-		privateNets: netutil.SubnetSetFunc(netutil.IsLocallyServed),
-	}
-
-	testCases := []struct {
-		want    assert.BoolAssertionFunc
-		name    string
-		cliAddr netip.AddrPort
-	}{{
-		want:    assert.True,
-		name:    "local",
-		cliAddr: netip.MustParseAddrPort("192.168.0.1:1"),
-	}, {
-		want:    assert.False,
-		name:    "external",
-		cliAddr: netip.MustParseAddrPort("250.249.0.1:1"),
-	}, {
-		want:    assert.False,
-		name:    "invalid",
-		cliAddr: netip.AddrPort{},
-	}}
-
-	for _, tc := range testCases {
-		t.Run(tc.name, func(t *testing.T) {
-			proxyCtx := &proxy.DNSContext{
-				Addr: tc.cliAddr,
-			}
-			dctx := &dnsContext{
-				proxyCtx: proxyCtx,
-			}
-			s.processDetermineLocal(dctx)
-
-			tc.want(t, dctx.isLocalClient)
-		})
-	}
-}
-
 func TestServer_ProcessDHCPHosts_localRestriction(t *testing.T) {
 	const (
 		localDomainSuffix = "lan"
@@ -482,9 +445,9 @@ func TestServer_ProcessDHCPHosts_localRestriction(t *testing.T) {
 
 			dctx := &dnsContext{
 				proxyCtx: &proxy.DNSContext{
-					Req: req,
+					Req:             req,
+					IsPrivateClient: tc.isLocalCli,
 				},
-				isLocalClient: tc.isLocalCli,
 			}
 
 			res := s.processDHCPHosts(dctx)
@@ -617,9 +580,9 @@ func TestServer_ProcessDHCPHosts(t *testing.T) {
 
 		dctx := &dnsContext{
 			proxyCtx: &proxy.DNSContext{
-				Req: req,
+				Req:             req,
+				IsPrivateClient: true,
 			},
-			isLocalClient: true,
 		}
 
 		t.Run(tc.name, func(t *testing.T) {
@@ -654,19 +617,28 @@ func TestServer_ProcessDHCPHosts(t *testing.T) {
 	}
 }
 
-func TestServer_ProcessRestrictLocal(t *testing.T) {
+// TODO(e.burkov):  Rewrite this test to use the whole server instead of just
+// testing the [handleDNSRequest] method.  See comment on
+// "from_external_for_local" test case.
+func TestServer_HandleDNSRequest_restrictLocal(t *testing.T) {
+	intAddr := netip.MustParseAddr("192.168.1.1")
+	intPTRQuestion, err := netutil.IPToReversedAddr(intAddr.AsSlice())
+	require.NoError(t, err)
+
+	extAddr := netip.MustParseAddr("254.253.252.1")
+	extPTRQuestion, err := netutil.IPToReversedAddr(extAddr.AsSlice())
+	require.NoError(t, err)
+
 	const (
-		extPTRQuestion = "251.252.253.254.in-addr.arpa."
-		extPTRAnswer   = "host1.example.net."
-		intPTRQuestion = "1.1.168.192.in-addr.arpa."
-		intPTRAnswer   = "some.local-client."
+		extPTRAnswer = "host1.example.net."
+		intPTRAnswer = "some.local-client."
 	)
 
 	localUpsHdlr := dns.HandlerFunc(func(w dns.ResponseWriter, req *dns.Msg) {
 		resp := cmp.Or(
 			aghtest.MatchedResponse(req, dns.TypePTR, extPTRQuestion, extPTRAnswer),
 			aghtest.MatchedResponse(req, dns.TypePTR, intPTRQuestion, intPTRAnswer),
-			new(dns.Msg).SetRcode(req, dns.RcodeNameError),
+			(&dns.Msg{}).SetRcode(req, dns.RcodeNameError),
 		)
 
 		require.NoError(testutil.PanicT{}, w.WriteMsg(resp))
@@ -692,123 +664,165 @@ func TestServer_ProcessRestrictLocal(t *testing.T) {
 	startDeferStop(t, s)
 
 	testCases := []struct {
-		name     string
-		want     string
-		question net.IP
-		cliAddr  netip.AddrPort
-		wantLen  int
+		name      string
+		question  string
+		wantErr   error
+		wantAns   []dns.RR
+		isPrivate bool
 	}{{
-		name:     "from_local_to_external",
-		want:     "host1.example.net.",
-		question: net.IP{254, 253, 252, 251},
-		cliAddr:  netip.MustParseAddrPort("192.168.10.10:1"),
-		wantLen:  1,
+		name:     "from_local_for_external",
+		question: extPTRQuestion,
+		wantErr:  nil,
+		wantAns: []dns.RR{&dns.PTR{
+			Hdr: dns.RR_Header{
+				Name:     dns.Fqdn(extPTRQuestion),
+				Rrtype:   dns.TypePTR,
+				Class:    dns.ClassINET,
+				Ttl:      60,
+				Rdlength: uint16(len(extPTRAnswer) + 1),
+			},
+			Ptr: dns.Fqdn(extPTRAnswer),
+		}},
+		isPrivate: true,
 	}, {
-		name:     "from_external_for_local",
-		want:     "",
-		question: net.IP{192, 168, 1, 1},
-		cliAddr:  netip.MustParseAddrPort("254.253.252.251:1"),
-		wantLen:  0,
+		// In theory this case is not reproducible because [proxy.Proxy] should
+		// respond to such queries with NXDOMAIN before they reach
+		// [Server.handleDNSRequest].
+		name:      "from_external_for_local",
+		question:  intPTRQuestion,
+		wantErr:   upstream.ErrNoUpstreams,
+		wantAns:   nil,
+		isPrivate: false,
 	}, {
 		name:     "from_local_for_local",
-		want:     "some.local-client.",
-		question: net.IP{192, 168, 1, 1},
-		cliAddr:  netip.MustParseAddrPort("192.168.1.2:1"),
-		wantLen:  1,
+		question: intPTRQuestion,
+		wantErr:  nil,
+		wantAns: []dns.RR{&dns.PTR{
+			Hdr: dns.RR_Header{
+				Name:     dns.Fqdn(intPTRQuestion),
+				Rrtype:   dns.TypePTR,
+				Class:    dns.ClassINET,
+				Ttl:      60,
+				Rdlength: uint16(len(intPTRAnswer) + 1),
+			},
+			Ptr: dns.Fqdn(intPTRAnswer),
+		}},
+		isPrivate: true,
 	}, {
 		name:     "from_external_for_external",
-		want:     "host1.example.net.",
-		question: net.IP{254, 253, 252, 251},
-		cliAddr:  netip.MustParseAddrPort("254.253.252.255:1"),
-		wantLen:  1,
+		question: extPTRQuestion,
+		wantErr:  nil,
+		wantAns: []dns.RR{&dns.PTR{
+			Hdr: dns.RR_Header{
+				Name:     dns.Fqdn(extPTRQuestion),
+				Rrtype:   dns.TypePTR,
+				Class:    dns.ClassINET,
+				Ttl:      60,
+				Rdlength: uint16(len(extPTRAnswer) + 1),
+			},
+			Ptr: dns.Fqdn(extPTRAnswer),
+		}},
+		isPrivate: false,
 	}}
 
 	for _, tc := range testCases {
-		reqAddr, err := dns.ReverseAddr(tc.question.String())
-		require.NoError(t, err)
-		req := createTestMessageWithType(reqAddr, dns.TypePTR)
+		pref, extErr := netutil.ExtractReversedAddr(tc.question)
+		require.NoError(t, extErr)
 
+		req := createTestMessageWithType(dns.Fqdn(tc.question), dns.TypePTR)
 		pctx := &proxy.DNSContext{
-			Proto: proxy.ProtoTCP,
-			Req:   req,
-			Addr:  tc.cliAddr,
+			Req:             req,
+			IsPrivateClient: tc.isPrivate,
+		}
+		// TODO(e.burkov):  Configure the subnet set properly.
+		if netutil.IsLocallyServed(pref.Addr()) {
+			pctx.RequestedPrivateRDNS = pref
 		}
 
 		t.Run(tc.name, func(t *testing.T) {
-			err = s.handleDNSRequest(nil, pctx)
-			require.NoError(t, err)
-			require.NotNil(t, pctx.Res)
-			require.Len(t, pctx.Res.Answer, tc.wantLen)
+			err = s.handleDNSRequest(s.dnsProxy, pctx)
+			require.ErrorIs(t, err, tc.wantErr)
 
-			if tc.wantLen > 0 {
-				assert.Equal(t, tc.want, pctx.Res.Answer[0].(*dns.PTR).Ptr)
-			}
+			require.NotNil(t, pctx.Res)
+			assert.Equal(t, tc.wantAns, pctx.Res.Answer)
 		})
 	}
 }
 
-func TestServer_ProcessLocalPTR_usingResolvers(t *testing.T) {
+func TestServer_ProcessUpstream_localPTR(t *testing.T) {
 	const locDomain = "some.local."
 	const reqAddr = "1.1.168.192.in-addr.arpa."
 
 	localUpsHdlr := dns.HandlerFunc(func(w dns.ResponseWriter, req *dns.Msg) {
 		resp := cmp.Or(
 			aghtest.MatchedResponse(req, dns.TypePTR, reqAddr, locDomain),
-			new(dns.Msg).SetRcode(req, dns.RcodeNameError),
+			(&dns.Msg{}).SetRcode(req, dns.RcodeNameError),
 		)
 
 		require.NoError(testutil.PanicT{}, w.WriteMsg(resp))
 	})
 	localUpsAddr := aghtest.StartLocalhostUpstream(t, localUpsHdlr).String()
 
-	s := createTestServer(
-		t,
-		&filtering.Config{
-			BlockingMode: filtering.BlockingModeDefault,
-		},
-		ServerConfig{
-			UDPListenAddrs: []*net.UDPAddr{{}},
-			TCPListenAddrs: []*net.TCPAddr{{}},
-			Config: Config{
-				UpstreamMode:     UpstreamModeLoadBalance,
-				EDNSClientSubnet: &EDNSClientSubnet{Enabled: false},
-			},
-			UsePrivateRDNS:    true,
-			LocalPTRResolvers: []string{localUpsAddr},
-			ServePlainDNS:     true,
-		},
-	)
-
-	var proxyCtx *proxy.DNSContext
-	var dnsCtx *dnsContext
-	setup := func(use bool) {
-		proxyCtx = &proxy.DNSContext{
-			Addr: testClientAddrPort,
-			Req:  createTestMessageWithType(reqAddr, dns.TypePTR),
+	newPrxCtx := func() (prxCtx *proxy.DNSContext) {
+		return &proxy.DNSContext{
+			Addr:                 testClientAddrPort,
+			Req:                  createTestMessageWithType(reqAddr, dns.TypePTR),
+			IsPrivateClient:      true,
+			RequestedPrivateRDNS: netip.MustParsePrefix("192.168.1.1/32"),
 		}
-		dnsCtx = &dnsContext{
-			proxyCtx:        proxyCtx,
-			unreversedReqIP: netip.MustParseAddr("192.168.1.1"),
-		}
-		s.conf.UsePrivateRDNS = use
 	}
 
 	t.Run("enabled", func(t *testing.T) {
-		setup(true)
+		s := createTestServer(
+			t,
+			&filtering.Config{
+				BlockingMode: filtering.BlockingModeDefault,
+			},
+			ServerConfig{
+				UDPListenAddrs: []*net.UDPAddr{{}},
+				TCPListenAddrs: []*net.TCPAddr{{}},
+				Config: Config{
+					UpstreamMode:     UpstreamModeLoadBalance,
+					EDNSClientSubnet: &EDNSClientSubnet{Enabled: false},
+				},
+				UsePrivateRDNS:    true,
+				LocalPTRResolvers: []string{localUpsAddr},
+				ServePlainDNS:     true,
+			},
+		)
+		pctx := newPrxCtx()
 
-		rc := s.processLocalPTR(dnsCtx)
+		rc := s.processUpstream(&dnsContext{proxyCtx: pctx})
 		require.Equal(t, resultCodeSuccess, rc)
-		require.NotEmpty(t, proxyCtx.Res.Answer)
+		require.NotEmpty(t, pctx.Res.Answer)
+		ptr := testutil.RequireTypeAssert[*dns.PTR](t, pctx.Res.Answer[0])
 
-		assert.Equal(t, locDomain, proxyCtx.Res.Answer[0].(*dns.PTR).Ptr)
+		assert.Equal(t, locDomain, ptr.Ptr)
 	})
 
 	t.Run("disabled", func(t *testing.T) {
-		setup(false)
+		s := createTestServer(
+			t,
+			&filtering.Config{
+				BlockingMode: filtering.BlockingModeDefault,
+			},
+			ServerConfig{
+				UDPListenAddrs: []*net.UDPAddr{{}},
+				TCPListenAddrs: []*net.TCPAddr{{}},
+				Config: Config{
+					UpstreamMode:     UpstreamModeLoadBalance,
+					EDNSClientSubnet: &EDNSClientSubnet{Enabled: false},
+				},
+				UsePrivateRDNS:    false,
+				LocalPTRResolvers: []string{localUpsAddr},
+				ServePlainDNS:     true,
+			},
+		)
+		pctx := newPrxCtx()
 
-		rc := s.processLocalPTR(dnsCtx)
-		require.Equal(t, resultCodeFinish, rc)
-		require.Empty(t, proxyCtx.Res.Answer)
+		rc := s.processUpstream(&dnsContext{proxyCtx: pctx})
+		require.Equal(t, resultCodeError, rc)
+		require.Empty(t, pctx.Res.Answer)
 	})
 }
 
@@ -826,129 +840,3 @@ func TestIPStringFromAddr(t *testing.T) {
 		assert.Empty(t, ipStringFromAddr(nil))
 	})
 }
-
-// TODO(e.burkov):  Add fuzzing when moving to golibs.
-func TestExtractARPASubnet(t *testing.T) {
-	const (
-		v4Suf   = `in-addr.arpa.`
-		v4Part  = `2.1.` + v4Suf
-		v4Whole = `4.3.` + v4Part
-
-		v6Suf   = `ip6.arpa.`
-		v6Part  = `4.3.2.1.0.0.0.0.0.0.0.0.0.0.0.0.` + v6Suf
-		v6Whole = `f.e.d.c.0.0.0.0.0.0.0.0.0.0.0.0.` + v6Part
-	)
-
-	v4Pref := netip.MustParsePrefix("1.2.3.4/32")
-	v4PrefPart := netip.MustParsePrefix("1.2.0.0/16")
-	v6Pref := netip.MustParsePrefix("::1234:0:0:0:cdef/128")
-	v6PrefPart := netip.MustParsePrefix("0:0:0:1234::/64")
-
-	testCases := []struct {
-		want    netip.Prefix
-		name    string
-		domain  string
-		wantErr string
-	}{{
-		want:   netip.Prefix{},
-		name:   "not_an_arpa",
-		domain: "some.domain.name.",
-		wantErr: `bad arpa domain name "some.domain.name.": ` +
-			`not a reversed ip network`,
-	}, {
-		want:   netip.Prefix{},
-		name:   "bad_domain_name",
-		domain: "abc.123.",
-		wantErr: `bad domain name "abc.123": ` +
-			`bad top-level domain name label "123": all octets are numeric`,
-	}, {
-		want:    v4Pref,
-		name:    "whole_v4",
-		domain:  v4Whole,
-		wantErr: "",
-	}, {
-		want:    v4PrefPart,
-		name:    "partial_v4",
-		domain:  v4Part,
-		wantErr: "",
-	}, {
-		want:    v4Pref,
-		name:    "whole_v4_within_domain",
-		domain:  "a." + v4Whole,
-		wantErr: "",
-	}, {
-		want:    v4Pref,
-		name:    "whole_v4_additional_label",
-		domain:  "5." + v4Whole,
-		wantErr: "",
-	}, {
-		want:    v4PrefPart,
-		name:    "partial_v4_within_domain",
-		domain:  "a." + v4Part,
-		wantErr: "",
-	}, {
-		want:    v4PrefPart,
-		name:    "overflow_v4",
-		domain:  "256." + v4Part,
-		wantErr: "",
-	}, {
-		want:    v4PrefPart,
-		name:    "overflow_v4_within_domain",
-		domain:  "a.256." + v4Part,
-		wantErr: "",
-	}, {
-		want:   netip.Prefix{},
-		name:   "empty_v4",
-		domain: v4Suf,
-		wantErr: `bad arpa domain name "in-addr.arpa": ` +
-			`not a reversed ip network`,
-	}, {
-		want:   netip.Prefix{},
-		name:   "empty_v4_within_domain",
-		domain: "a." + v4Suf,
-		wantErr: `bad arpa domain name "in-addr.arpa": ` +
-			`not a reversed ip network`,
-	}, {
-		want:    v6Pref,
-		name:    "whole_v6",
-		domain:  v6Whole,
-		wantErr: "",
-	}, {
-		want:   v6PrefPart,
-		name:   "partial_v6",
-		domain: v6Part,
-	}, {
-		want:    v6Pref,
-		name:    "whole_v6_within_domain",
-		domain:  "g." + v6Whole,
-		wantErr: "",
-	}, {
-		want:    v6Pref,
-		name:    "whole_v6_additional_label",
-		domain:  "1." + v6Whole,
-		wantErr: "",
-	}, {
-		want:    v6PrefPart,
-		name:    "partial_v6_within_domain",
-		domain:  "label." + v6Part,
-		wantErr: "",
-	}, {
-		want:    netip.Prefix{},
-		name:    "empty_v6",
-		domain:  v6Suf,
-		wantErr: `bad arpa domain name "ip6.arpa": not a reversed ip network`,
-	}, {
-		want:    netip.Prefix{},
-		name:    "empty_v6_within_domain",
-		domain:  "g." + v6Suf,
-		wantErr: `bad arpa domain name "ip6.arpa": not a reversed ip network`,
-	}}
-
-	for _, tc := range testCases {
-		t.Run(tc.name, func(t *testing.T) {
-			subnet, err := extractARPASubnet(tc.domain)
-			testutil.AssertErrorMsg(t, tc.wantErr, err)
-			assert.Equal(t, tc.want, subnet)
-		})
-	}
-}
diff --git a/internal/dnsforward/recursiondetector.go b/internal/dnsforward/recursiondetector.go
deleted file mode 100644
index 870779f2..00000000
--- a/internal/dnsforward/recursiondetector.go
+++ /dev/null
@@ -1,115 +0,0 @@
-package dnsforward
-
-import (
-	"bytes"
-	"encoding/binary"
-	"time"
-
-	"github.com/AdguardTeam/golibs/cache"
-	"github.com/AdguardTeam/golibs/log"
-	"github.com/AdguardTeam/golibs/netutil"
-	"github.com/miekg/dns"
-)
-
-// uint* sizes in bytes to improve readability.
-//
-// TODO(e.burkov): Remove when there will be a more regardful way to define
-// those.  See https://github.com/golang/go/issues/29982.
-const (
-	uint16sz = 2
-	uint64sz = 8
-)
-
-// recursionDetector detects recursion in DNS forwarding.
-type recursionDetector struct {
-	recentRequests cache.Cache
-	ttl            time.Duration
-}
-
-// check checks if the passed req was already sent by the server.
-func (rd *recursionDetector) check(msg dns.Msg) (ok bool) {
-	if len(msg.Question) == 0 {
-		return false
-	}
-
-	key := msgToSignature(msg)
-	expireData := rd.recentRequests.Get(key)
-	if expireData == nil {
-		return false
-	}
-
-	expire := time.Unix(0, int64(binary.BigEndian.Uint64(expireData)))
-
-	return time.Now().Before(expire)
-}
-
-// add caches the msg if it has anything in the questions section.
-func (rd *recursionDetector) add(msg dns.Msg) {
-	now := time.Now()
-
-	if len(msg.Question) == 0 {
-		return
-	}
-
-	key := msgToSignature(msg)
-	expire64 := uint64(now.Add(rd.ttl).UnixNano())
-	expire := make([]byte, uint64sz)
-	binary.BigEndian.PutUint64(expire, expire64)
-
-	rd.recentRequests.Set(key, expire)
-}
-
-// clear clears the recent requests cache.
-func (rd *recursionDetector) clear() {
-	rd.recentRequests.Clear()
-}
-
-// newRecursionDetector returns the initialized *recursionDetector.
-func newRecursionDetector(ttl time.Duration, suspectsNum uint) (rd *recursionDetector) {
-	return &recursionDetector{
-		recentRequests: cache.New(cache.Config{
-			EnableLRU: true,
-			MaxCount:  suspectsNum,
-		}),
-		ttl: ttl,
-	}
-}
-
-// msgToSignature converts msg into it's signature represented in bytes.
-func msgToSignature(msg dns.Msg) (sig []byte) {
-	sig = make([]byte, uint16sz*2+netutil.MaxDomainNameLen)
-	// The binary.BigEndian byte order is used everywhere except when the real
-	// machine's endianness is needed.
-	byteOrder := binary.BigEndian
-	byteOrder.PutUint16(sig[0:], msg.Id)
-	q := msg.Question[0]
-	byteOrder.PutUint16(sig[uint16sz:], q.Qtype)
-	copy(sig[2*uint16sz:], []byte(q.Name))
-
-	return sig
-}
-
-// msgToSignatureSlow converts msg into it's signature represented in bytes in
-// the less efficient way.
-//
-// See BenchmarkMsgToSignature.
-func msgToSignatureSlow(msg dns.Msg) (sig []byte) {
-	type msgSignature struct {
-		name  [netutil.MaxDomainNameLen]byte
-		id    uint16
-		qtype uint16
-	}
-
-	b := bytes.NewBuffer(sig)
-	q := msg.Question[0]
-	signature := msgSignature{
-		id:    msg.Id,
-		qtype: q.Qtype,
-	}
-	copy(signature.name[:], q.Name)
-	if err := binary.Write(b, binary.BigEndian, signature); err != nil {
-		log.Debug("writing message signature: %s", err)
-	}
-
-	return b.Bytes()
-}
diff --git a/internal/dnsforward/recursiondetector_test.go b/internal/dnsforward/recursiondetector_test.go
deleted file mode 100644
index 4edb3a37..00000000
--- a/internal/dnsforward/recursiondetector_test.go
+++ /dev/null
@@ -1,148 +0,0 @@
-package dnsforward
-
-import (
-	"encoding/binary"
-	"testing"
-	"time"
-
-	"github.com/miekg/dns"
-	"github.com/stretchr/testify/assert"
-)
-
-func TestRecursionDetector_Check(t *testing.T) {
-	rd := newRecursionDetector(0, 2)
-
-	const (
-		recID  = 1234
-		recTTL = time.Hour * 100
-	)
-
-	const nonRecID = recID * 2
-
-	sampleQuestion := dns.Question{
-		Name:  "some.domain",
-		Qtype: dns.TypeAAAA,
-	}
-	sampleMsg := dns.Msg{
-		MsgHdr: dns.MsgHdr{
-			Id: recID,
-		},
-		Question: []dns.Question{sampleQuestion},
-	}
-
-	// Manually add the message with big ttl.
-	key := msgToSignature(sampleMsg)
-	expire := make([]byte, uint64sz)
-	binary.BigEndian.PutUint64(expire, uint64(time.Now().Add(recTTL).UnixNano()))
-	rd.recentRequests.Set(key, expire)
-
-	// Add an expired message.
-	sampleMsg.Id = nonRecID
-	rd.add(sampleMsg)
-
-	testCases := []struct {
-		name      string
-		questions []dns.Question
-		id        uint16
-		want      bool
-	}{{
-		name:      "recurrent",
-		questions: []dns.Question{sampleQuestion},
-		id:        recID,
-		want:      true,
-	}, {
-		name:      "not_suspected",
-		questions: []dns.Question{sampleQuestion},
-		id:        recID + 1,
-		want:      false,
-	}, {
-		name:      "expired",
-		questions: []dns.Question{sampleQuestion},
-		id:        nonRecID,
-		want:      false,
-	}, {
-		name:      "empty",
-		questions: []dns.Question{},
-		id:        nonRecID,
-		want:      false,
-	}}
-
-	for _, tc := range testCases {
-		sampleMsg.Id = tc.id
-		sampleMsg.Question = tc.questions
-		t.Run(tc.name, func(t *testing.T) {
-			detected := rd.check(sampleMsg)
-			assert.Equal(t, tc.want, detected)
-		})
-	}
-}
-
-func TestRecursionDetector_Suspect(t *testing.T) {
-	rd := newRecursionDetector(0, 1)
-
-	testCases := []struct {
-		name string
-		msg  dns.Msg
-		want int
-	}{{
-		name: "simple",
-		msg: dns.Msg{
-			MsgHdr: dns.MsgHdr{
-				Id: 1234,
-			},
-			Question: []dns.Question{{
-				Name:  "some.domain",
-				Qtype: dns.TypeA,
-			}},
-		},
-		want: 1,
-	}, {
-		name: "unencumbered",
-		msg:  dns.Msg{},
-		want: 0,
-	}}
-
-	for _, tc := range testCases {
-		t.Run(tc.name, func(t *testing.T) {
-			t.Cleanup(rd.clear)
-			rd.add(tc.msg)
-			assert.Equal(t, tc.want, rd.recentRequests.Stats().Count)
-		})
-	}
-}
-
-var sink []byte
-
-func BenchmarkMsgToSignature(b *testing.B) {
-	const name = "some.not.very.long.host.name"
-
-	msg := dns.Msg{
-		MsgHdr: dns.MsgHdr{
-			Id: 1234,
-		},
-		Question: []dns.Question{{
-			Name:  name,
-			Qtype: dns.TypeAAAA,
-		}},
-	}
-
-	b.Run("efficient", func(b *testing.B) {
-		b.ReportAllocs()
-
-		for i := 0; i < b.N; i++ {
-			sink = msgToSignature(msg)
-		}
-
-		assert.NotEmpty(b, sink)
-	})
-
-	b.Run("inefficient", func(b *testing.B) {
-		b.ReportAllocs()
-
-		for i := 0; i < b.N; i++ {
-			sink = msgToSignatureSlow(msg)
-		}
-
-		assert.NotEmpty(b, sink)
-	})
-}
diff --git a/internal/dnsforward/upstreams.go b/internal/dnsforward/upstreams.go
index c7f6677e..0754daae 100644
--- a/internal/dnsforward/upstreams.go
+++ b/internal/dnsforward/upstreams.go
@@ -2,90 +2,77 @@ package dnsforward
 
 import (
 	"fmt"
-	"net/netip"
-	"os"
 	"slices"
 	"time"
 
 	"github.com/AdguardTeam/AdGuardHome/internal/aghnet"
 	"github.com/AdguardTeam/dnsproxy/proxy"
 	"github.com/AdguardTeam/dnsproxy/upstream"
-	"github.com/AdguardTeam/golibs/errors"
 	"github.com/AdguardTeam/golibs/log"
 	"github.com/AdguardTeam/golibs/netutil"
 	"github.com/AdguardTeam/golibs/stringutil"
-	"golang.org/x/exp/maps"
 )
 
-// loadUpstreams parses upstream DNS servers from the configured file or from
-// the configuration itself.
-func (s *Server) loadUpstreams() (upstreams []string, err error) {
-	if s.conf.UpstreamDNSFileName == "" {
-		return stringutil.FilterOut(s.conf.UpstreamDNS, IsCommentOrEmpty), nil
+// newBootstrap returns a bootstrap resolver based on the configuration of s.
+// boots are the upstream resolvers that should be closed after use.  r is the
+// actual bootstrap resolver, which may include the system hosts.
+//
+// TODO(e.burkov):  This function currently returns a resolver and a slice of
+// the upstream resolvers, which are essentially the same.  boots are returned
+// for being able to close them afterwards, but it introduces an implicit
+// contract that r could only be used before that.  Anyway, this code should
+// improve when the [proxy.UpstreamConfig] will become an [upstream.Resolver]
+// and be used here.
+func newBootstrap(
+	addrs []string,
+	etcHosts upstream.Resolver,
+	opts *upstream.Options,
+) (r upstream.Resolver, boots []*upstream.UpstreamResolver, err error) {
+	if len(addrs) == 0 {
+		addrs = defaultBootstrap
 	}
 
-	var data []byte
-	data, err = os.ReadFile(s.conf.UpstreamDNSFileName)
+	boots, err = aghnet.ParseBootstraps(addrs, opts)
 	if err != nil {
-		return nil, fmt.Errorf("reading upstream from file: %w", err)
+		// Don't wrap the error, since it's informative enough as is.
+		return nil, nil, err
 	}
 
-	upstreams = stringutil.SplitTrimmed(string(data), "\n")
+	var parallel upstream.ParallelResolver
+	for _, b := range boots {
+		parallel = append(parallel, upstream.NewCachingResolver(b))
+	}
 
-	log.Debug("dnsforward: got %d upstreams in %q", len(upstreams), s.conf.UpstreamDNSFileName)
+	if etcHosts != nil {
+		r = upstream.ConsequentResolver{etcHosts, parallel}
+	} else {
+		r = parallel
+	}
 
-	return stringutil.FilterOut(upstreams, IsCommentOrEmpty), nil
+	return r, boots, nil
 }
 
-// prepareUpstreamSettings sets upstream DNS server settings.
-func (s *Server) prepareUpstreamSettings(boot upstream.Resolver) (err error) {
-	// Load upstreams either from the file, or from the settings
-	var upstreams []string
-	upstreams, err = s.loadUpstreams()
-	if err != nil {
-		return fmt.Errorf("loading upstreams: %w", err)
-	}
-
-	s.conf.UpstreamConfig, err = s.prepareUpstreamConfig(upstreams, defaultDNS, &upstream.Options{
-		Bootstrap:    boot,
-		Timeout:      s.conf.UpstreamTimeout,
-		HTTPVersions: UpstreamHTTPVersions(s.conf.UseHTTP3Upstreams),
-		PreferIPv6:   s.conf.BootstrapPreferIPv6,
-		// Use a customized set of RootCAs, because Go's default mechanism of
-		// loading TLS roots does not always work properly on some routers so we're
-		// loading roots manually and pass it here.
-		//
-		// See [aghtls.SystemRootCAs].
-		//
-		// TODO(a.garipov): Investigate if that's true.
-		RootCAs:      s.conf.TLSv12Roots,
-		CipherSuites: s.conf.TLSCiphers,
-	})
-	if err != nil {
-		return fmt.Errorf("preparing upstream config: %w", err)
-	}
-
-	return nil
-}
-
-// prepareUpstreamConfig returns the upstream configuration based on upstreams
-// and configuration of s.
-func (s *Server) prepareUpstreamConfig(
+// newUpstreamConfig returns the upstream configuration based on upstreams.  If
+// upstreams slice specifies no default upstreams, defaultUpstreams are used to
+// create upstreams with no domain specifications.  opts are used when creating
+// upstream configuration.
+func newUpstreamConfig(
 	upstreams []string,
 	defaultUpstreams []string,
 	opts *upstream.Options,
 ) (uc *proxy.UpstreamConfig, err error) {
 	uc, err = proxy.ParseUpstreamsConfig(upstreams, opts)
 	if err != nil {
-		return nil, fmt.Errorf("parsing upstream config: %w", err)
+		return uc, fmt.Errorf("parsing upstreams: %w", err)
 	}
 
-	if len(uc.Upstreams) == 0 && defaultUpstreams != nil {
+	if len(uc.Upstreams) == 0 && len(defaultUpstreams) > 0 {
 		log.Info("dnsforward: warning: no default upstreams specified, using %v", defaultUpstreams)
+
 		var defaultUpstreamConfig *proxy.UpstreamConfig
 		defaultUpstreamConfig, err = proxy.ParseUpstreamsConfig(defaultUpstreams, opts)
 		if err != nil {
-			return nil, fmt.Errorf("parsing default upstreams: %w", err)
+			return uc, fmt.Errorf("parsing default upstreams: %w", err)
 		}
 
 		uc.Upstreams = defaultUpstreamConfig.Upstreams
@@ -94,6 +81,54 @@ func (s *Server) prepareUpstreamConfig(
 	return uc, nil
 }
 
+// newPrivateConfig creates an upstream configuration for resolving PTR records
+// for local addresses.  The configuration is built either from the provided
+// addresses or from the system resolvers.  unwanted filters the resulting
+// upstream configuration.
+func newPrivateConfig(
+	addrs []string,
+	unwanted addrPortSet,
+	sysResolvers SystemResolvers,
+	privateNets netutil.SubnetSet,
+	opts *upstream.Options,
+) (uc *proxy.UpstreamConfig, err error) {
+	confNeedsFiltering := len(addrs) > 0
+	if confNeedsFiltering {
+		addrs = stringutil.FilterOut(addrs, IsCommentOrEmpty)
+	} else {
+		sysResolvers := slices.DeleteFunc(slices.Clone(sysResolvers.Addrs()), unwanted.Has)
+		addrs = make([]string, 0, len(sysResolvers))
+		for _, r := range sysResolvers {
+			addrs = append(addrs, r.String())
+		}
+	}
+
+	log.Debug("dnsforward: upstreams to resolve ptr for local addresses: %v", addrs)
+
+	uc, err = proxy.ParseUpstreamsConfig(addrs, opts)
+	if err != nil {
+		return uc, fmt.Errorf("preparing private upstreams: %w", err)
+	}
+
+	if !confNeedsFiltering {
+		return uc, nil
+	}
+
+	err = filterOutAddrs(uc, unwanted)
+	if err != nil {
+		return uc, fmt.Errorf("filtering private upstreams: %w", err)
+	}
+
+	// Prevalidate the config to catch the exact error before creating proxy.
+	// See TODO on [PrivateRDNSError].
+	err = proxy.ValidatePrivateConfig(uc, privateNets)
+	if err != nil {
+		return uc, &PrivateRDNSError{err: err}
+	}
+
+	return uc, nil
+}
+
 // UpstreamHTTPVersions returns the HTTP versions for upstream configuration
 // depending on configuration.
 func UpstreamHTTPVersions(http3 bool) (v []upstream.HTTPVersion) {
@@ -130,85 +165,9 @@ func setProxyUpstreamMode(
 	return nil
 }
 
-// createBootstrap returns a bootstrap resolver based on the configuration of s.
-// boots are the upstream resolvers that should be closed after use.  r is the
-// actual bootstrap resolver, which may include the system hosts.
-//
-// TODO(e.burkov):  This function currently returns a resolver and a slice of
-// the upstream resolvers, which are essentially the same.  boots are returned
-// for being able to close them afterwards, but it introduces an implicit
-// contract that r could only be used before that.  Anyway, this code should
-// improve when the [proxy.UpstreamConfig] will become an [upstream.Resolver]
-// and be used here.
-func (s *Server) createBootstrap(
-	addrs []string,
-	opts *upstream.Options,
-) (r upstream.Resolver, boots []*upstream.UpstreamResolver, err error) {
-	if len(addrs) == 0 {
-		addrs = defaultBootstrap
-	}
-
-	boots, err = aghnet.ParseBootstraps(addrs, opts)
-	if err != nil {
-		// Don't wrap the error, since it's informative enough as is.
-		return nil, nil, err
-	}
-
-	var parallel upstream.ParallelResolver
-	for _, b := range boots {
-		parallel = append(parallel, upstream.NewCachingResolver(b))
-	}
-
-	if s.etcHosts != nil {
-		r = upstream.ConsequentResolver{s.etcHosts, parallel}
-	} else {
-		r = parallel
-	}
-
-	return r, boots, nil
-}
-
 // IsCommentOrEmpty returns true if s starts with a "#" character or is empty.
 // This function is useful for filtering out non-upstream lines from upstream
 // configs.
 func IsCommentOrEmpty(s string) (ok bool) {
 	return len(s) == 0 || s[0] == '#'
 }
-
-// ValidateUpstreamsPrivate validates each upstream and returns an error if any
-// upstream is invalid or if there are no default upstreams specified.  It also
-// checks each domain of domain-specific upstreams for being ARPA pointing to
-// a locally-served network.  privateNets must not be nil.
-func ValidateUpstreamsPrivate(upstreams []string, privateNets netutil.SubnetSet) (err error) {
-	conf, err := proxy.ParseUpstreamsConfig(upstreams, &upstream.Options{})
-	if err != nil {
-		return fmt.Errorf("creating config: %w", err)
-	}
-
-	if conf == nil {
-		return nil
-	}
-
-	keys := maps.Keys(conf.DomainReservedUpstreams)
-	slices.Sort(keys)
-
-	var errs []error
-	for _, domain := range keys {
-		var subnet netip.Prefix
-		subnet, err = extractARPASubnet(domain)
-		if err != nil {
-			errs = append(errs, err)
-
-			continue
-		}
-
-		if !privateNets.Contains(subnet.Addr()) {
-			errs = append(
-				errs,
-				fmt.Errorf("arpa domain %q should point to a locally-served network", domain),
-			)
-		}
-	}
-
-	return errors.Annotate(errors.Join(errs...), "checking domain-specific upstreams: %w")
-}
diff --git a/internal/home/dns.go b/internal/home/dns.go
index 8cab8156..0ca9717d 100644
--- a/internal/home/dns.go
+++ b/internal/home/dns.go
@@ -18,7 +18,6 @@ import (
 	"github.com/AdguardTeam/AdGuardHome/internal/filtering"
 	"github.com/AdguardTeam/AdGuardHome/internal/querylog"
 	"github.com/AdguardTeam/AdGuardHome/internal/stats"
-	"github.com/AdguardTeam/dnsproxy/upstream"
 	"github.com/AdguardTeam/golibs/errors"
 	"github.com/AdguardTeam/golibs/log"
 	"github.com/AdguardTeam/golibs/netutil"
@@ -157,14 +156,12 @@ func initDNSServer(
 		return fmt.Errorf("newServerConfig: %w", err)
 	}
 
+	// Try to prepare the server with disabled private RDNS resolution if it
+	// failed to prepare as is.  See TODO on [ErrBadPrivateRDNSUpstreams].
 	err = Context.dnsServer.Prepare(dnsConf)
+	if privRDNSErr := (&dnsforward.PrivateRDNSError{}); errors.As(err, &privRDNSErr) {
+		log.Info("WARNING: %s; trying to disable private RDNS resolution", err)
 
-	// TODO(e.burkov):  Recreate the server with private RDNS disabled.  This
-	// should go away once the private RDNS resolution is moved to the proxy.
-	var locResErr *dnsforward.LocalResolversError
-	if errors.As(err, &locResErr) && errors.Is(locResErr.Err, upstream.ErrNoUpstreams) {
-		log.Info("WARNING: no local resolvers configured while private RDNS " +
-			"resolution enabled, trying to disable")
 		dnsConf.UsePrivateRDNS = false
 		err = Context.dnsServer.Prepare(dnsConf)
 	}