check if string exists in a file

Sounds overly complex, no reason to check by line or anything if you want to know if a string is present in a file. You can replace all of your code simply with :

if(File.ReadAllText(path).Contains(domain))
{
    MessageBox.Show("There is a match");
}

I would recommend seting and flag and checking it as follows...

using (StreamReader sr = File.OpenText(path))
{
    string[] lines = File.ReadAllLines(path);
    bool isMatch = false;
    for (int x = 0; x < lines.Length - 1; x++)
    {
        if (domain == lines[x])
        {
            sr.Close();
            MessageBox.Show("there is a match");
            isMatch = true;
        }
    }
    if (!isMatch)
    {
        sr.Close();
        MessageBox.Show("there is no match");
    }
}

Good Luck!

Actually you don't need to read whole file into memory. There is File.ReadLines method which allows you enumerate file lines one by one, without reading whole file. You can create following method

private bool DomainExists(string domain)
{
    foreach(string line in File.ReadLines(path))
        if (domain == line)
            return true; // and stop reading lines

    return false;
}

Usage of this method looks like:

if (DomainExists(domain))
    MessageBox.Show("there is a match");
else
    MessageBox.Show("there is no match");

Also two side notes - you don't need StreamReader if you are reading lines with File.ReadAllLines (it creates reader internally). Just check - you even don't use sr variable anywhere. And second note - you don't need to manually close stream, if you wrapped it in using block. In that case stream will be disposed and closed automatically.