In both the pi-hole (exposed on the host) and dnsmasq (used as upstream by pi-hole) containers:
# Generated by Docker Engine.
# This file can be edited; Docker Engine will not make
further changes once it
# has been modified.
nameserver 127.0.0.11
options ndots:0
# Based on host file: '/etc/resolv.conf' (internal res
olver)
# ExtServers: [host(127.0.0.1)]
# Overrides: []
# Option ndots from: internal
So they are pointing to docker's embedded DNS, itself forwarding to the host.