Mails from certain domains not reaching virtual server

Hello,

We have created accounts on a newly created virtual server(Redhat linux 3ES, OGL virtualmin 2.610). Mails into and from the new server seem to working alright with local servers and a few domains such as gmail.com. However mails from certain domains such as yahoo.com (which uses qmail) always bounce back with error as "User not known".
Surprisingly, mails from local servers are sent/received without the virtual server being bound to any "dns", and with no entries in /etc/hosts. Attempts to bind to a "dns" results in a total stop of the mail services. Kindly let us know if we are missing something vital, and help us.
Thanks in advance.

-gowranga