Domain name system is a global hierarchical system with different servers answering for different part of the requested name. The different levels is deviated with dots in the name and the word in the end represent the highest level.

In your computer should be a DNS server configured, either manually or or it is provided automatically from a server at startup (DHCP server)

This DNS server replies on your name queries and find out which server has the answer if it can't answer itself. The answer is saved by the server for a given amount of time.

If you for example write www.networktools.se and your server does not have the answer saved it starts by asking the highest level (root servers) where to find .se. It got an answer pointing to the responsible server and query this server for networktools.se. The reply tells your server where to look after names in this domain and it asks the right server again. This server will have list with all the names and matching IP addresses and answer your server with the correct IP address for the machine holding the web pages of www.networktools.se. The server will save the answer and forward it to your PC.

The Swedish top domain .se is maintained by II-stiftelsen