DNS Service

I am trying to set up the DNS service that comes with the Turbolinux. The hand book that came with it is not real clear. If I have the NIC card on the machine config as follows what IP can I assign the name server?

NIC IP:192.168.1.102. As I understand it the numbers of the first three decimals represent the network id in a class C net. The last number of the dotted notation represents the host IP. Can you config the name server to an address that is not associated with a NIC card MAC address? I would like to provide DNS service to My home LAN that is private. Mainly trying to learn how it works. I know you can use the host look file on a small net.

Ron