Nginx Rewrite Rule:: index.html added to every permalink

Correct rewrite rules for wordpress.conf are:

location / {
        try_files $uri $uri/ /index.php?q=$uri&$args;
    }

but the main issue was location. I misread at Dreamhost’s wiki where I had to put this wordpress.conf. An awesome lady at Dreamhost explained it to me. I am very grateful for her telling me this oversight! With Dreamhost it has to be put @ /home/user/nginx/domain.com . After that I did a restart as root using /etc/init.d/nginx restart and now the permalinks are purring like a kitten!

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