pppd (and so pppoe) is capable to receive the upstream nameservers from your provider during connect and store them in /etc/ppp/resolv.conf.

To enable that feature you have to set the option usepeerdns either in /etc/ppp/peers/dsl-provider or /etc/ppp/options.

Next you have to change/enable dnsmasq to use that resolv.conf (probably additionally to /etc/hosts).

Edit /etc/dnsmasq.conf and set the resolv-file:

# Change this line if you want dns to get its upstream servers from
# somewhere other that /etc/resolv.conf
resolv-file=/etc/ppp/resolv.conf