I have been using dnsmasq on mac osx mountain lion which was installed via mac ports. Recently,I upgraded to Osx Mavericks and all of a sudden it has stopped working.
I
Solved mine by doing the following:
If your development domains are not .dev, then change the bolded parts to your domain. If you need other domains, you need to only repeat steps 2 and 6.
Source: This brilliant blog post by Alan Ivey.