To implement cascading DropDownList widgets and still virtualize the data is simple, because virtualization requires you to use a custom data source configuration.
It enables the usage of the
ToDataSourceResult methods, which internally parse all filter and page expression information, and apply it directly to the data.
To see the example, refer to the project on how to cascade the DropDownList with enabled virtualization.
For more runnable examples on the Kendo UI DropDownLists in ASP.NET MVC applications, browse its How To documentation folder.