This article is from the AmiTCP/IP FAQ, by Mike Meyer with numerous contributions by others.
(thanks Jarno :)
The "Domain names to search" are the domain names which are appended to a given host name on the search. If you have a name "foo" and the domain names to search are "bar.edu" and "zip.zop" then "foo.bar.edu" is tried first, and if that fails, "foo.zip.zop" is tried next. If the name to search includes the domain part, it is searched as it is.
 
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