Router handing out 127.0.0.1 as dns when I set custom dns in LAN setting

[shahidcodes]

I am running a dns adblocker which runs on IP 192.168.1.x, I configured the same in LAN/DHCP setting. But clients are getting 127.0.0.1 as DNS from the router. Is it faulty router?

 

[Trex]

Share router dhcp configuration.

 

[shahidcodes]

Here it is

 

[shahidcodes]

As a workaround I disabled router's DHCP and enabled adblocker's dhcp. Works fine now