Hi Itpadmin,
Generally, if you would like to host your DNS records at Office 365, you can change the NS point to Office 365. Office 365 will create related DNS record for Office 365 services and you cannot manage it. If you want to manually add DNS records, you can change the NS back to Godaddy side and add related DNS records.
For your reference:
http://onlinehelp.microsoft.com/en-us/office365-smallbusinesses/hh416759.aspx
Thanks,
Johnny Zhang