Set up AlwaysOn in virtual environment: How to add nodes to domain?
Finally after some reading more articles on Windows and AD Networking and speaking with abunch of people, this is what helped.

Settings on DC machine:

IP:                  192.168.1.10
Subnetmask:          255.255.255.0
Gateway: (none)

Preferred DNS: 127.0.0.1
Alternate DNS: (none)

On Each VM:

IP:                  192.168.1.11  (/12/13.../15 - on each node)
Subnetmask:          255.255.255.0
Gateway: (none)

Preferred DNS: 192.168.1.10
Alternate DNS: (none)

Restart the Network Adapter. BOOM !!

Now I can ping the DC and add them to the domain.

Why does it work now (but not before): 

For DC: I made the DNS as loopback IP as preferred DNS (rather than its own IP - 192.168.1.10). This way it knows that the machine itself is the DNS.

For VMs: Gave them valid static IPs, rather than dynamic IP. Set the DNS to the DC (this was set correctly even before).

Glad I learnt something new,
_UB