DNS resolving *has* to be done in the proxy server, otherwise it wouldn't know where to forward the request to.
A direct connection does not use a proxy server, so the browser has to do all the DNS lookups itself.
In the case of a PAC file, your browser might be doing DNS lookups too, but not always (depending on the content of the PAC file).
You're probably confusing the DNS prefetching-lookups (sent by the browser) with the ones needed to open the connection (sent by the browser and/or the proxyserver). In case of a PAC file, they're not always necessary, so we might disable prefetching in that case. See bug 507578.
DNS resolving *has* to be done in the proxy server, otherwise it wouldn't know where to forward the request to.
A direct connection does not use a proxy server, so the browser has to do all the DNS lookups itself.
In the case of a PAC file, your browser might be doing DNS lookups too, but not always (depending on the content of the PAC file).
You're probably confusing the DNS prefetching-lookups (sent by the browser) with the ones needed to open the connection (sent by the browser and/or the proxyserver). In case of a PAC file, they're not always necessary, so we might disable prefetching in that case. See bug 507578.