domain names and internationalization?

Hi,

Recently there has been discussion on the NFSv4 IETF working
group email list w.r.t. internationalization for the domain name
it uses for users/groups.

Right now, I am pretty sure the FreeBSD nfsuserd(8) only works
for ascii domain names, but...

I am hoping someone knows what DNS does in this area (the
working group list uses terms like umlaut, which I have never
even heard of;-).

I know essentially nothing about internationalization, so any hints
will be appreciated.

Thanks, rick