diff --git a/shadowsocks/asyncdns.py b/shadowsocks/asyncdns.py
index 45676ad..02311d2 100644
--- a/shadowsocks/asyncdns.py
+++ b/shadowsocks/asyncdns.py
@@ -22,6 +22,7 @@
 # SOFTWARE.
 
 import time
+import os
 import socket
 import struct
 import logging
@@ -173,7 +174,7 @@ def parse_response(data):
             # res_ra = header[2] & 128
             res_rcode = header[2] & 15
             assert res_tc == 0
-            assert res_rcode == 0
+            assert res_rcode in [0, 3]
             res_qdcount = header[3]
             res_ancount = header[4]
             res_nscount = header[5]
@@ -238,15 +239,19 @@ class DNSResolver(object):
     def __init__(self):
         self._loop = None
         self._request_id = 1
+        self._hosts = {}
         self._hostname_status = {}
         self._hostname_to_cb = {}
         self._cb_to_hostname = {}
         self._cache = lru_cache.LRUCache(timeout=300)
         self._last_time = time.time()
         self._sock = None
-        self._parse_config()
+        self._parse_resolv()
+        self._parse_hosts()
+        # TODO monitor hosts change and reload hosts
+        # TODO parse /etc/gai.conf and follow its rules
 
-    def _parse_config(self):
+    def _parse_resolv(self):
         try:
             with open('/etc/resolv.conf', 'rb') as f:
                 servers = []
@@ -255,7 +260,7 @@ class DNSResolver(object):
                     line = line.strip()
                     if line:
                         if line.startswith('nameserver'):
-                            parts = line.split(' ')
+                            parts = line.split()
                             if len(parts) >= 2:
                                 server = parts[1]
                                 if is_ip(server):
@@ -268,6 +273,25 @@ class DNSResolver(object):
             pass
         self._dns_server = ('8.8.8.8', 53)
 
+    def _parse_hosts(self):
+        etc_path = '/etc/hosts'
+        if os.environ.__contains__('WINDIR'):
+            etc_path = os.environ['WINDIR'] + '/system32/drivers/etc/hosts'
+        try:
+            with open(etc_path, 'rb') as f:
+                for line in f.readlines():
+                    line = line.strip()
+                    parts = line.split()
+                    if len(parts) >= 2:
+                        ip = parts[0]
+                        if is_ip(ip):
+                            for i in xrange(1, len(parts)):
+                                hostname = parts[i]
+                                if hostname:
+                                    self._hosts[hostname] = ip
+        except IOError:
+            self._hosts['localhost'] = '127.0.0.1'
+
     def add_to_loop(self, loop):
         if self._loop:
             raise Exception('already add to loop')
@@ -356,11 +380,15 @@ class DNSResolver(object):
         if not hostname:
             callback(None, Exception('empty hostname'))
         elif is_ip(hostname):
-            callback(hostname, None)
+            callback((hostname, hostname), None)
+        elif self._hosts.__contains__(hostname):
+            logging.debug('hit hosts: %s', hostname)
+            ip = self._hosts[hostname]
+            callback((hostname, ip), None)
         elif self._cache.__contains__(hostname):
             logging.debug('hit cache: %s', hostname)
             ip = self._cache[hostname]
-            callback(ip, None)
+            callback((hostname, ip), None)
         else:
             arr = self._hostname_to_cb.get(hostname, None)
             if not arr:
@@ -390,6 +418,8 @@ def test():
 
     for hostname in ['www.google.com',
                      '8.8.8.8',
+                     'localhost',
+                     'activate.adobe.com',
                      'www.twitter.com',
                      'ipv6.google.com',
                      'ipv6.l.google.com',