  It is pulled from the operating system. It is the host name within the OS. You need to have OpenManage Server Administrator installed for the iDRAC to be able to query the info from the OS.
I have a client with a PE R620 with an iDRAC7 trying to monitor their server's hardware health with SNMP traps. They're especially interested in the alertSystemFQDN varbind (1.3.6.1.4.1.674.10892.4.5000.10.8), which is apparently not being set and appears empty when they receive SNMP traps from the iDRAC. How exactly is the alertSystemFQDN varbind set? Is it user-configurable through racadm, or based on a DNS lookup, or what? I couldn't find an adequate explanation in the SNMP Reference Guide for iDRAC8.
SNMP Trap Variable alertSystemFQDN