Can a MySQL slave be a master at the same time?

The binlog on DB2 wasn't updating the slave updates. To daisy chain the replication, one must set log-slave-updates in my.conf.

http://dev.mysql.com/doc/refman/5.1/en/replication-options-slave.html#option_mysqld_log-slave-updates

Yes, it is possible :) This is called "Master with Relay Slave" replication and there a lot of documents about it on the net.

I'd recommend you to take a look at the official documentation here.

Btw, also take a look at these slides. They've some hints about replication topologies.

Hope this helps.

yes - you can daisy-chain mysql servers, you can even make a circular replication with two or more machines in it. just remember to enable binloging on slave that also acts as master.