Catalyzes the hydroxylation of 2-hexaprenyl-3-methyl-6-methoxy-1,4-benzoquinol (DMQH2) during ubiquinone biosynthesis (PubMed:16624818, PubMed:8621692, PubMed:9452453, PubMed:23940037). Has also a structural role in the COQ enzyme complex, stabilizing COQ3 and COQ4 polypeptides (PubMed:16624818). a 6-methoxy-3-methyl-2-all-trans-polyprenyl-1,4-benzoquinol + AH2 + O2 = A + a 3-demethylubiquinol + H2O Binds 2 iron ions per subunit. Dephosphorylation by PTC7 leads to activation. Cofactor biosynthesis; ubiquinone biosynthesis. Component of a multi-subunit COQ enzyme complex, composed of at least COQ3, COQ4, COQ5, COQ6, COQ7 and COQ9. Phosphorylated (PubMed:23940037). Dephosphorylated by PTC7; dephosphorylation is essential for enzyme activation (PubMed:23940037). Belongs to the COQ7 family. Was originally thought to be involved in carbon catabolite repression (PubMed:8557031). It has later been demonstrated that the catabolite-regulation defect in COQ7 mutants was a secondary effect of the respiration deficiency in ubiquinone-deficient mutants and could be rescued by the addition of exogenous ubiquinone (PubMed:9452453).