>> 5) No NATing is done on this machine. > > Ah, "transparent" flag does not means what you think then. > > In Squid-3.2 and older it means "traffic arriving at this port has been > redirected here via NAT in the firewall". > > What did you actually want? I have 300 kids with laptops. It would be difficult to setup each individual browser for proxy. Proxy is a LAN client like the rest of laptops. Firwall (NAT, DHCP etc.) sends/forwards all the traffic to the proxy. No NAT is preformed on the proxy. The proxy computer is just a Squid 3.1 box with dnsmasq. Thank you!!