Hyper-V cannot mount remote ISO directly as DVD drive and the only way to do this is to copy to Hyper-V Server’s local drive.
However, this process is time consuming and it takes unnecessary storage.
Fortunately, Hyper-V can be setup to mount Remote ISO too.
In this tutorial, mounting Remote ISO is setup using Active Directory Group for centralized management.

Step 1: Create Security Group in Active Directory

1. Run Active Directory User and Computer (ADUC)

2. Create a new Security Group with Global scope.

Add Hyper-V Server Computer accounts in Members tab

Step 2: Create Share Folder for Remote ISO

1. Logon to File Server
2. At Remote ISO Folder to be shared, create a share
3. Open Remote ISO Folder Properties:

In Sharing tab, add AD Group created in Step 1 and set permission to Allow: Read
In Security tab, add AD Group created in Step 1 and set permission to Allow: Read

Step 3: Assign Trust Delegation For CIFS Service

Applies To: Windows Server 2012/2012 R2

1. Run Active Directory User and Computer (ADUC)

2. Find Hyper-V Computer Object to be delegated to access Remote ISO

3. Open Computer Object Properties and navigate to Delegation tab.

If the tab does not show, make sure you have enable to Advanced Features.

4. In Delegation tab:

Set Trust the computer for delegation to specified services only and Use any authentication protocol
Click Add button and add Remote ISO File Server Computer and select CIFS service