diff --git a/src/dnsmasq/dnsmasq.h b/src/dnsmasq/dnsmasq.h
index 7428b7f62..286d7c228 100644
--- a/src/dnsmasq/dnsmasq.h
+++ b/src/dnsmasq/dnsmasq.h
@@ -282,7 +282,8 @@ struct event_desc {
 #define OPT_CACHE_RR       71
 #define OPT_LOCALHOST_SERVICE  72
 #define OPT_LOG_PROTO      73
-#define OPT_LAST           74
+#define OPT_NO_0x20        74
+#define OPT_LAST           75
 
 #define OPTION_BITS (sizeof(unsigned int)*8)
 #define OPTION_SIZE ( (OPT_LAST/OPTION_BITS)+((OPT_LAST%OPTION_BITS)!=0) )
diff --git a/src/dnsmasq/forward.c b/src/dnsmasq/forward.c
index cf553288c..5e51f5fe9 100644
--- a/src/dnsmasq/forward.c
+++ b/src/dnsmasq/forward.c
@@ -338,7 +338,7 @@ static void forward_query(int udpfd, union mysockaddr *udpaddr,
       forward->new_id = get_id();
       header->id = ntohs(forward->new_id);
       
-      forward->encode_bitmap = rand32();
+      forward->encode_bitmap = option_bool(OPT_NO_0x20) ? 0 : rand32();
       p = (unsigned char *)(header+1);
       if (!extract_name(header, plen, &p, NULL, EXTR_NAME_FLIP, forward->encode_bitmap))
 	goto reply;
@@ -2146,7 +2146,7 @@ static ssize_t tcp_talk(int first, int last, int start, unsigned char *packet,
 	 sending replies containing questions and bogus answers.
 	 Try another server, or give up */
       p = (unsigned char *)(header+1);
-      if (extract_name(header, rsize, &p, daemon->namebuff, EXTR_NAME_NOCASE, 4) != 1)
+      if (extract_name(header, rsize, &p, daemon->namebuff, EXTR_NAME_COMPARE, 4) != 1)
 	continue;
       GETSHORT(rtype, p); 
       GETSHORT(rclass, p);
@@ -3225,22 +3225,35 @@ static struct frec *lookup_frec(char *target, int class, int rrtype, int id, int
 	(header = blockdata_retrieve(f->stash, f->stash_len, NULL)))
       {
 	unsigned char *p = (unsigned char *)(header+1);
-	int hclass, hrrtype;
+	int hclass, hrrtype, rc;
 
 	/* Case sensitive compare for DNS-0x20 encoding. */
-	if (extract_name(header, f->stash_len, &p, target, EXTR_NAME_NOCASE, 4) != 1)
-	  continue;
-		   
-	GETSHORT(hrrtype, p);
-	GETSHORT(hclass, p);
-		   
-	/* type checked by flags for DNSSEC queries. */
-	if (rrtype != -1 && rrtype != hrrtype)
-	  continue;
-		   
-	if (class != hclass)
-	  continue;
-	
+	if ((rc = extract_name(header, f->stash_len, &p, target, option_bool(OPT_NO_0x20) ? EXTR_NAME_COMPARE : EXTR_NAME_NOCASE, 4)))
+	  {
+	    GETSHORT(hrrtype, p);
+	    GETSHORT(hclass, p);
+	    
+	    /* type checked by flags for DNSSEC queries. */
+	    if (rrtype != -1 && rrtype != hrrtype)
+	      continue;
+	    
+	    if (class != hclass)
+	      continue;
+	  }
+
+	if (rc != 1)
+	  {
+	    static int warned = 0;
+	    
+	    if (rc == 3 && !warned)
+	      {
+		my_syslog(LOG_WARNING, _("Case mismatch in DNS reply - check bit 0x20 encoding."));
+		warned = 1;
+	      }
+	    
+	    continue;
+	  }
+		
 	return f;
       }
   
diff --git a/src/dnsmasq/option.c b/src/dnsmasq/option.c
index 4f8bcf14d..9c850a9be 100644
--- a/src/dnsmasq/option.c
+++ b/src/dnsmasq/option.c
@@ -197,6 +197,7 @@ struct myoption {
 #define LOPT_MAX_PROCS     384
 #define LOPT_DNSSEC_LIMITS 385
 #define LOPT_PXE_OPT       386
+#define LOPT_NO_ENCODE     387
 
 #ifdef HAVE_GETOPT_LONG
 static const struct option opts[] =  
@@ -251,6 +252,7 @@ static const struct myoption opts[] =
     { "local-ttl", 1, 0, 'T' },
     { "no-negcache", 0, 0, 'N' },
     { "no-round-robin", 0, 0, LOPT_NORR },
+    { "no-0x20-encode", 0, 0, LOPT_NO_ENCODE },
     { "cache-rr", 1, 0, LOPT_CACHE_RR },
     { "addn-hosts", 1, 0, 'H' },
     { "hostsdir", 1, 0, LOPT_HOST_INOTIFY },
@@ -595,6 +597,7 @@ static struct {
   { LOPT_UMBRELLA, ARG_ONE, "[=<optspec>]", gettext_noop("Send Cisco Umbrella identifiers including remote IP."), NULL },
   { LOPT_QUIET_TFTP, OPT_QUIET_TFTP, NULL, gettext_noop("Do not log routine TFTP."), NULL },
   { LOPT_NORR, OPT_NORR, NULL, gettext_noop("Suppress round-robin ordering of DNS records."), NULL },
+  { LOPT_NO_ENCODE, OPT_NO_0x20, NULL, gettext_noop("Suppress DNS bit 0x20 encoding."), NULL },
   { LOPT_NO_IDENT, OPT_NO_IDENT, NULL, gettext_noop("Do not add CHAOS TXT records."), NULL },
   { LOPT_CACHE_RR, ARG_DUP, "<RR-type>", gettext_noop("Cache this DNS resource record type."), NULL },
   { LOPT_MAX_PROCS, ARG_ONE, "<integer>", gettext_noop("Maximum number of concurrent tcp connections."), NULL },
diff --git a/src/dnsmasq/rfc1035.c b/src/dnsmasq/rfc1035.c
index 4db992d4f..557b92a36 100644
--- a/src/dnsmasq/rfc1035.c
+++ b/src/dnsmasq/rfc1035.c
@@ -25,6 +25,7 @@
    return = 0 -> error
    return = 1 -> extract OK, compare OK, flip OK
    return = 2 -> extract OK, compare failed.
+   return = 3 -> extract OK, compare failed but only on case.
 */
 int extract_name(struct dns_header *header, size_t plen, unsigned char **pp, 
 		 char *name, int func, unsigned int parm)
@@ -141,9 +142,21 @@ int extract_name(struct dns_header *header, size_t plen, unsigned char **pp,
 		    
 		    if (case_insens && c2 >= 'A' && c2 <= 'Z')
 		      c2 += 'a' - 'A';
+
+		    if (!case_insens && retvalue != 2 && c1 != c2)
+		      {
+			if (c1 >= 'A' && c1 <= 'Z')
+			  c1 += 'a' - 'A';
+			
+			if (c2 >= 'A' && c2 <= 'Z')
+			  c2 += 'a' - 'A';
+			
+			if (c1 == c2)
+			  retvalue = 3;
+		      }
 		    
 		    if (c1 != c2)
-		      retvalue =  2;
+		      retvalue = 2;
 		  }
 	      }