Introducing Microsoft Connected Cache: Microsoft’s cloud-managed cache solution

Good question.  Let me provide some details around "Cache Server Hostname Source" policy is implemented.  

You will set this policy to configure one or more Delivery Optimization in Network Cache servers through a custom DHCP Option. One or more values can be added as either fully qualified domain names (FQDN) or IP addresses.  To add multiple values, separate each FQDN or IP address by commas.

When DHCP Option ID (1) is set, the client will query DHCP Option ID 235 and use the returned FQDN or IP value as Cache Server Hostname value.  This policy will be overridden when the Cache Server Hostname policy has been set.

When DHCP Option ID Force (2) is set, the client will query DHCP Option ID 235 and use the returned FQDN or IP value as Cache Server Hostname value, and will override the Cache Server Hostname policy if it has been set.

Thanks