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DNS stands for Domain Name System (The "S" in DNS can also stand for Service or Server). It specifies how domain names are translated into IP addresses.
Since the Internet is based on IP addresses, each time you use a domain name, a DNS server must translate the name into the correct IP address. A DNS server is a computer which takes in a domain name and returns the correct IP address for the domain. This IP address represents the domain's actual location on the Internet.