Let's look at the implications of this ....
A DNS server is equivalent to a telephone directory. You know ... those times when you have no telephone book at your fingertips but you need to know the phone number of a certain person or company? You dial 411 and a person or voice comes on and asks "for what city" etc. It gives you the number and then you dial that number and connect with your other party. That's what a DNS server does for computers. You type in an "address" into the top bar --- like "google.com" and you connect to a DNS server which tells you the "number to dial is" ... 184.108.40.206 (for Vancouver Canada). Your computer dials that and presto ... you connect with the other end as you expect to.
Ok so ... question is ... how does your own computer know where to "phone" to get the DNS server in the first place? Well, there are many DNS servers all over the world but there will be about 3 numbers of different DNS servers implanted into your personal router and/or your own internet provider will implant its own DNS server into your modem. You'll never be at a loss for an implanted DNS server address somewhere in your equipment.
What this particular malware did then ... is tell your computer to ALWAYS go to its own DNS server first to ask for address numbers. When you went there and asked for the number of an address, that bad server would give you the number of some malicious site or some porn site etc. ... instead of the one your asked for. So your computer would dial THAT number and you would receive quite a surprise. Maybe ... instead of Network 54, you would find yourself connected to some porn site or gambling site instead.
But HOW did your computer get this malware in the first place? Well .. you somehow got "infected" with it.
Now, here's the important thing to keep in mind. HOW ARE computer infections dealt with MOST of the time?
Well, you have ANTI VIRUS programs running on your computer to STOP this crap before it happens! You have Microsoft sending UPDATES which includes the MS malicious software removal tool ... which will cleanse your machine at least once a month if you have anything bad running on it.
But here is the FBI ... getting involved in the business of computer security! What business do THEY have getting into the business of computers????
What the FBI did (supposedly at least) ... is FIND the address of this DNS server or servers ... REQUISITION that address and site ... and kept RUNNING it (on your behalf, of course, like some benevolent bed fellow). So instead of getting rid of the bad malware on your computer -like you should- ... if you didn't KNOW that you were infected, you would have been using this FBI-seized DNS server for MONTHS already ... without knowing about it!
See, that's a bit like going to bed with -what you THINK is your wife or husband but you really don't know because you always go to bed in the dark and get up before light and go your separate ways to do your own respective chores. Then one day or morning you happen to wake up a bit late and see that it's NOT who you think you were sleeping with at all! But then the other party says, "sorry, I'm leaving now. I'm tired of this game. Hope your husband comes back soon to take over again. Good luck."
This is what the FBI has done here.
Do you THINK it's on the level?