First off, you're not using the full power of cat. The loop can be replaced by just
http://stackoverflow.com/questions/16873669/combine-multiple-text-files-and-remove-duplicates
cat data/* > dnsFull
assuming that file is initially empty.

Then there's all those temporary files that force programs to wait for hard disks (commonly the slowest parts in modern computer systems). Use a pipeline:

cat data/* | sort | uniq > dnsOut
This is still wasteful since sort alone can do what you're using cat and uniq for; the whole script can be replaced by

sort -u data/* > dnsOut
If this is still not fast enough, then realize that sorting takes O(n lg n) time while deduplication can be done in linear time with Awk:

awk '{if (!a[$0]++) print}' data/* > dnsOut