DHT11 sensor from ebay precision?

I am having issues with DHT11 (3-pin version). Most of the time it seems to work ok, i.e. temp does not fluctuate too much. But this morning was jumping between 14 and 27 degrees Celsius. Is this normal or do I have a dud?

A DHT-11 is not a very precise sensor but under normal circumstances you shouldn't see jump of more than 10°C in a short time. Did you check that the cabling is OK? How often do you read the temperature? How did you wire it to the Arduino? Post your sketch.

Looks like DS18B20 is the way to go. I am using breadboard, I will double check the connections.

A DS18B20 is much more precise but uses a different protocol. If ever possible don't use parasite mode but power it directly (3 wires).