Nagios With Service Check Notifications

We are starting to use Nagios for some remote service checks (http, smpt, pop, ssh, etc..) and the notifications are not being sent out. We have the regular hosts configured and those are being sent out just fine.

Here's what we have currently:

Part of our services.cfg looks like this:

Code:
#### Generic services template ################
define service{
name generic-service;
active_checks_enabled 1;
obsess_over_service 1;
check_freshness 0;
notifications_enabled 1;
event_handler_enabled 1;
flap_detection_enabled 1;
retain_status_information 1;
retain_nonstatus_information 1;
register 0;
}
define service{
use generic-service
name basic-service
is_volatile 0
check_period 24x7
max_check_attempts 15
normal_check_interval 5
retry_check_interval 1
notification_interval 20
notification_period 24x7
register 0
}
define service{
use basic-service
name dns-service
check_command check_dns
max_check_attempts 10
check_period 24x7
notification_interval 20
notification_period 24x7
notification_options c,r
contact_groups localadmin
register 0
}
#### HOST01 ######
define service{
use dns-service
host_name host01
servicegroups mygroup
service_description DNS
contact_groups localadmin
}
To me, that looks correct. Host01's service check should inherit
everything through 'use dns-service' line.

checkcommands.cfg file for DNS:

Code:
# 'check_dns' command definition
define command{
command_name check_dns
command_line $USER1$/check_dns -H $HOSTADDRESS$
}
contactgroups.cfg:

Code:
define contactgroup{
contactgroup_name localadmin
alias Site Administrator
members nagios
}
contacts.cfg:

Code:
define contact{
contact_name nagios
alias admin
host_notification_period 24x7
service_notification_period 24x7
service_notification_options w,u,c,r,f
host_notification_options d,u,r,f
service_notification_commands notify-by-email
host_notification_commands host-notify-by-email
email mail@domain.com
}

I believe the above should be correct since I have host and service to
be notified by email. Obviously I'm overlooking something.