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Moving external DNS server to VPS
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Okay, then I think you will be good with around 2GB and 2 cores. I cannot speak highly enough for using Unbound or NSD. As of about two or three years ago, an authoritative DNS capability was added to Unbound and I cannot speak highly enough of it. I've used Unbound in production reliably for that long. After moving my domains to Cloudflare though, I found DNS resolution to be speedier simply because the DNS servers sit on an isolated segment instead of mixing traffic so I went that way. But I would go back to using Unbound in a heartbeat if Cloudflare decided to do something stupid. Which is always a distinct possibility because, well, it's Cloudflare.
Thanks for the detailed response! I will definitely check out unbound. Sounds perfect. And 2 cores and 2 GB RAM is exactly what I was hoping would be enough, so I can keep costs down.