We got it figured out. Have to add the DNS entries manually. Does not need to be enabled in the TUI if you setup DNS manually. Thanks all!
Need clarification on the DNS entries needed to setup server initiated discovery. Not able to use the TUI method. Using Windows DNS. Thanks Manually—Add the following three records to your DNS server on the network for which the interface is configured on the appliance. Ensure to replace all instances of domain or Subdomain.domain with the appropriate DNS domain and the system hostname.
Server initiated discovery