[Exim] How to read from /etc/hosts before doing DNS lookup

I have tried searching through the archives, and ive tried a few things but I
still havnt been able to get it to use /etc/hosts before using the MX records.
I run FreeBSD 4.2 and my /etc/host.conf is set to use /etc/hosts before
using the DNS servers. I tried adding gethostbyname in the lookuphosts options.
Here is what I used....

lookuphost:
driver = lookuphost
transport = remote_smtp
gethostbyname = true

but it didnt change anything. Any help would be appreciated!

Thanks in advance,

Peter