If under DNS cache you do not have "Allow Remote Requests" checked, and the router LAN is assigned 192.168.1.1, dhcp clients to the router are assigned out of 192.168.1.0/24 and router receives DNS servers from PPPoE will the clients be able to use the DNS cache on 192.168.1.1?

I do see the docs but still am not sure.

http://wiki.mikrotik.com/wiki/Manual:IP/DNS

What does "Allow Remote Requests" exactly change?

Allow Remote Requests:

enabled = Will be a DNS Server, responding to dns requests.
disabled = Will be a DNS Client, not responding to dns request. Used only for local dns resolve. (the mikrotik itself)

So it would likely be a good idea to do this to protect the DNS cache if "Allow Remote Requests" is enabled?

/ip firewall filter
add action=drop chain=input dst-port=53 protocol=udp src-address=!192.168.1.0/24

or

/ip firewall filter
add action=drop chain=input dst-port=53 in-interface=pppoe-out1 protocol=udp

Yes, you should block others from using your DNS Server and enable only your network to use it. Using filters, like you said.

Not so fast.........
It depends upon the fiilter rules in place.
For example I have drop all else rules at the end and work on the principle of - if its not permitted its dropped.

So my input rules are as such.....
add action=accept chain=input comment="Allow LAN DNS queries-UDP" dst-port=53 \
in-interface-list=LAN protocol=udp
add action=accept chain=input comment="Allow LAN DNS queries - TCP" dst-port=\
53 in-interface-list=LAN protocol=tcp

Any other traffic on port 53 will be dropped by my last rule.
add action=drop chain=input comment="DROP ALL ELSE"

If you want to be slightly more paranoid you could always add these rules in the forward chain BEFORE
the first accept, established rule............
add action=drop chain=forward comment="Drop LAN DNS queries-UDP" dst-port=53 \
in-interface-list=WAN protocol=udp
add action=drop chain=forward comment="Drop LAN DNS queries - TCP" dst-port=\
53 in-interface-list=WAN protocol=tcp

However since I have a drop all else rule in my forward chain as the last rule, I dont think I need this.

you replied to a post from 2012

I need the practice LOL.