Unusual behavior in iptables

Question

I am currently running a xubuntu 16.04.1 VM on VMWare using bridged networking. The end goal is to have only DNS and outgoing HTTP/HTTPS.

Iptables (latest version with iptables-persistent) is reacting strangely to commands. When I issue below, I have no connection, as expected.

 -P INPUT DROP
 -P FORWARD DROP
 -P OUTPUT DROP
COMMIT

When I issue localhost access and DNS, the firewall is open to all connections

 -P INPUT DROP
 -P FORWARD DROP
 -P OUTPUT DROP
 -A OUTPUT -p udp --dport 53
 -A INPUT -p udp --sport 53
COMMIT

Then when I run iptables -F all connections are still allowed for a few minutes then I loose connection as before.

Ultimately, I'm wondering why the DNS and localhost rules are making the firewall fully open. Is everything routed through localhost?