diff --git a/plugin/hosts/README.md b/plugin/hosts/README.md
index 60135e71a..b18438cc6 100644
--- a/plugin/hosts/README.md
+++ b/plugin/hosts/README.md
@@ -15,6 +15,9 @@ The plugin reloads the content of the hosts file every 5 seconds. Upon reload, C
 new definitions. Should the file be deleted, any inlined content will continue to be served. When
 the file is restored, it will then again be used.
 
+If you want to pass the request to the rest of the plugin chain if there is no match in the *hosts*
+plugin, you must specify the `fallthrough` option.
+
 This plugin can only be used once per Server Block.
 
 ## The hosts file
@@ -60,7 +63,9 @@ hosts [FILE [ZONES...]] {
    then all of them will be treated as the additional content for hosts file. The specified hosts
    file path will still be read but entries will be overridden.
 * `ttl` change the DNS TTL of the records generated (forward and reverse). The default is 3600 seconds (1 hour).
-* `reload` change the period between each hostsfile reload. A time of zero seconds disable the feature. Examples of valid durations: "300ms", "1.5h" or "2h45m" are valid duration with units "ns" (nanosecond), "us" (or "µs" for microsecond), "ms" (millisecond), "s" (second), "m" (minute), "h" (hour).
+* `reload` change the period between each hostsfile reload. A time of zero seconds disables the
+  feature. Examples of valid durations: "300ms", "1.5h" or "2h45m". See Go's
+  [time](https://godoc.org/time). package.
 * `no_reverse` disable the automatic generation of the `in-addr.arpa` or `ip6.arpa` entries for the hosts
 * `fallthrough` If zone matches and no record can be generated, pass request to the next plugin.
   If **[ZONES...]** is omitted, then fallthrough happens for all zones for which the plugin
diff --git a/plugin/hosts/hosts.go b/plugin/hosts/hosts.go
index 54b090b4d..a94c65a7e 100644
--- a/plugin/hosts/hosts.go
+++ b/plugin/hosts/hosts.go
@@ -29,8 +29,8 @@ func (h Hosts) ServeDNS(ctx context.Context, w dns.ResponseWriter, r *dns.Msg) (
 
 	zone := plugin.Zones(h.Origins).Matches(qname)
 	if zone == "" {
-		// PTR zones don't need to be specified in Origins
-		if state.Type() != "PTR" {
+		// PTR zones don't need to be specified in Origins.
+		if state.QType() != dns.TypePTR {
 			// if this doesn't match we need to fall through regardless of h.Fallthrough
 			return plugin.NextOrFailure(h.Name(), h.Next, ctx, w, r)
 		}
@@ -56,8 +56,10 @@ func (h Hosts) ServeDNS(ctx context.Context, w dns.ResponseWriter, r *dns.Msg) (
 		if h.Fall.Through(qname) {
 			return plugin.NextOrFailure(h.Name(), h.Next, ctx, w, r)
 		}
-		if !h.otherRecordsExist(state.QType(), qname) {
-			return dns.RcodeNameError, nil
+		// We want to send an NXDOMAIN, but because of /etc/hosts' setup we don't have a SOA, so we make it REFUSED
+		// to at least give an answer back to signals we're having problems resolving this.
+		if !h.otherRecordsExist(qname) {
+			return dns.RcodeServerFailure, nil
 		}
 	}
 
@@ -70,23 +72,12 @@ func (h Hosts) ServeDNS(ctx context.Context, w dns.ResponseWriter, r *dns.Msg) (
 	return dns.RcodeSuccess, nil
 }
 
-func (h Hosts) otherRecordsExist(qtype uint16, qname string) bool {
-	switch qtype {
-	case dns.TypeA:
-		if len(h.LookupStaticHostV6(qname)) > 0 {
-			return true
-		}
-	case dns.TypeAAAA:
-		if len(h.LookupStaticHostV4(qname)) > 0 {
-			return true
-		}
-	default:
-		if len(h.LookupStaticHostV4(qname)) > 0 {
-			return true
-		}
-		if len(h.LookupStaticHostV6(qname)) > 0 {
-			return true
-		}
+func (h Hosts) otherRecordsExist(qname string) bool {
+	if len(h.LookupStaticHostV4(qname)) > 0 {
+		return true
+	}
+	if len(h.LookupStaticHostV6(qname)) > 0 {
+		return true
 	}
 	return false
 }
diff --git a/plugin/hosts/setup.go b/plugin/hosts/setup.go
index 73fd3cec4..981ea141f 100644
--- a/plugin/hosts/setup.go
+++ b/plugin/hosts/setup.go
@@ -73,13 +73,12 @@ func setup(c *caddy.Controller) error {
 func hostsParse(c *caddy.Controller) (Hosts, error) {
 	config := dnsserver.GetConfig(c)
 
-	options := newOptions()
-
 	h := Hosts{
 		Hostsfile: &Hostsfile{
 			path:    "/etc/hosts",
 			hmap:    newMap(),
-			options: options,
+			inline:  newMap(),
+			options: newOptions(),
 		},
 	}
 
@@ -129,7 +128,7 @@ func hostsParse(c *caddy.Controller) (Hosts, error) {
 			case "fallthrough":
 				h.Fall.SetZonesFromArgs(c.RemainingArgs())
 			case "no_reverse":
-				options.autoReverse = false
+				h.options.autoReverse = false
 			case "ttl":
 				remaining := c.RemainingArgs()
 				if len(remaining) < 1 {
@@ -142,7 +141,7 @@ func hostsParse(c *caddy.Controller) (Hosts, error) {
 				if ttl <= 0 || ttl > 65535 {
 					return h, c.Errf("ttl provided is invalid")
 				}
-				options.ttl = uint32(ttl)
+				h.options.ttl = uint32(ttl)
 			case "reload":
 				remaining := c.RemainingArgs()
 				if len(remaining) != 1 {
@@ -155,7 +154,7 @@ func hostsParse(c *caddy.Controller) (Hosts, error) {
 				if reload < 0 {
 					return h, c.Errf("invalid negative duration for reload '%s'", remaining[0])
 				}
-				options.reload = reload
+				h.options.reload = reload
 			default:
 				if len(h.Fall.Zones) == 0 {
 					line := strings.Join(append([]string{c.Val()}, c.RemainingArgs()...), " ")