I am having the same issue as well on all iOS 14 devices, they seem unable to resolve using a custom internal DNS server obtained via DHCP. In my case it resolves to the outside domain as well, which isn't good because a lot of internal systems aren't working at home.
I'm using Synology DNS & Pi Hole. Issue is only with iOS 14 devices, DHCP server is a Ubiquiti UDMP.
Any fixes known for know? Would love to hear!