DC3 is explicitly described as a domain controller named dc3.corp.fabrikam.com that will exist inside Vnet1, meaning it must be a genuine, writable domain controller for Fabrikam ' s existing corp.fabrikam.com AD DS forest, replicating with DC1 and DC2. The only way to run an actual domain controller for an existing on-premises forest inside Azure is to deploy a regular Azure virtual machine, place it on Vnet1, install the AD DS role on it, and promote it as an additional domain controller for corp.fabrikam.com. Microsoft Entra Domain Services is a fundamentally different, fully managed service: it creates its own separate, standalone managed domain and does not add a domain controller to, or replicate directly with, an existing on-premises forest, so it cannot be used to deploy " DC3 " as described. Microsoft Entra Application Proxy publishes on-premises web applications to external users and has nothing to do with domain controller placement. A Microsoft Entra administrative unit is a container used to scope administrative permissions over Microsoft Entra objects and is unrelated to deploying infrastructure. Therefore, an Azure virtual machine, promoted to a domain controller, is the correct implementation for DC3.