Thanks Ntr0P for responding quickly. The two domains are 80km apart and connected by a frame-relay line CIR 256.
The main thing is I'm not sure if my forwarders are working correctly.
When I arrived here there was a DNS forwarder address which was pointing our main office(domain3) this again connected through a F-Relay 512. This meant if this line went down, and this is obviously managed by a third party, that we would not have any DNS resolution for some applications ie FTP doesn't use any resolution other than this main office DNS server. If I take off the DNS from the list it doesn't work.
Our Proxy uses 2 external DNS for the internet and this works fine for domains1+2.
Presently I created a secondary DNS server in let's say Domain2 copying most of the zones on DNS server domain1. After tuning these to reduce errors it seems to work fine for all internel requests.
The question is how to solve this single point of failure for FTP.