What is DNS sinkhole?

A DNS sinkhole, also known as a sinkhole server, Internet sinkhole, or Blackhole DNS is a DNS server that has been configured to hand out non-routable addresses for a certain set of domain names. Computers that use the sinkhole fail to access the real site. The higher up the DNS resolution chain the sinkhole is, the more requests will fail, because of the greater number of lower NS servers that in turn serve a greater number of clients. Some of the larger botnets have been made unusable by TLD sinkholes that span the entire Internet. DNS Sinkholes are effective at detecting and blocking bots and other malicious traffic.

By default, the local hosts file on a computer is checked before DNS servers, and can be used to block sites in the same way.