Who is the sender of this Delivery Failure Report?
As I got it, this is not a matter of your server not being able to route mails to the recipient, but the recipient's server refusing your mail, because it could not verify the sender. Also, the Notes.ini parameter DNSServer should usually not be necessary, if the underlying Operating System's TCP/IP stack is configured correctly. See:
Again, I must admit, that I'm no expert in this field.