I'm setting up a web hosting on my VPS, I want to host several websites on my vps, I have two domains, domain1.com and domain2.com and a website for each hosted on iis, I know that I should add these host names to my dns. I have a zone named domain1.com, when I want to add domain2.com as new host it will automatically set FQDN to domain2.com.domain1.com How should I config my DNS? Thanks for your help.
You need a separate zone for each domain.
Here are some instructions from one web host on how to do it. The process should be similar on any web host.
To host multiple domain names on a single server, create a separate domain zone for each domain name... At a minimum, you'll need an A record for each domain name pointing to the server's IP address.