How Proxy DNS works? Can they capture my data?

Question

Update: I've read this article to understand how Proxy DNS works, but still not sure if they can capture my data or not?

How can some services apply HTTP proxy by modifying DNS server?

I'm using this 3rd party Proxy DNS entry to bypass country restrictions to Hulu.com and Netflix. I was wondering if that 3rd Party DNS guys can capture my data? Or IS it only my DNS request go through them? With all the Heart Bleed Bug around, I wouldn't be comfortable if they can capture my VPN or SSL data.

Answer 1

In every case, as you use his DNS, he knows all your dns requests.
So let's say you visit facebook.com, you ask his proxy for the ip.

So if he wants, he can tell his dns to change some data, so it might send you the ip of a webserver, which also proxies "facebook.com" (mitm attack).
For you it looks like you visit facebook.com, but all data goes through this bad proxy. He can now get your password, include bad javascript and so on.

The same about your vpn, but only if you use pptp or vpn without certificates.