I have a few site host on a reseller account all using the same DNS. Will Google penalize them when I start driving traffic and back links to them because they use the same DNS?
Three separate sites? Probably not. If they all link to each other then there is some chance of being called a link farm though three sites that chance would be really small.
Do they share the same IP as well, shared IP or do they have unique. If they are on unique IP's then you shouldn't worry too much. But be wary of doing it on a larger scale.