Howdy,
Well, an FQDN should be in the format “host.domain.tld”, so in your case, you’d want your hostname to be something like “server1.dungen.com”.
Problems can arise when a Virtual Server contains the same name as the hostname, so it prevents you from creating a Virtual Server with that name.
My recommendation would be to change your server’s hostname to be a full FQDN in the host.domain.tld format. At that point, you should then be able to add a Virtual Server of the name “dungen.com”.
-Eric