Cyrus sasl auth requires entry in /etc/hosts

[Ramprasad]

Hi,
   I have a cyrus setup with one primary domain and many virtual domains

A) Saslauthd is running as 
saslauthd -m /var/run/saslauthd -a pam -r


B) Username in ldap
for primary domain 
uid=userid

for virtual domain 
uid=userid at second-domain.com


Now when my /etc/hosts does not have 
127.0.0.1 primary-domain.com 

a primary-domain user is not able to authenticate .. but virtual domain
users have no problem at all 


Cant I do without the /etc/hosts entry
Thanks
Ram

PS:
I am using cyrus 2.3 on centos 4.3