So I have a single domain/forest with two type of users. Lets say Employees and Contractors. These users are separated by UPN, AD OU and a custom attribute. 

I have two O365 tenants, one for the employees and one for the contractors.

Can I use a single AADSync server to sync up on-premises users to their respective tenants?

I've read we can do multiple forests to a single tenant, but documentation is scare on doing single forests to multiple tenants.

If not, is there any way to collocate two installations on the one server. We're trying to reduce server count. 

Hi,

This is the forum to discuss questions and feedback for Microsoft Office client. There is not so much about Office 365 server/hosted aspect here, I would suggest you to post in the dedicated forum of Office 365 Community, where you can get more experienced responses:

http://community.office365.com/en-us/f/default.aspx

The reason why we recommend posting appropriately is you will get the most qualified pool of respondents, and other partners who read the forums regularly can either share their knowledge or learn from your interaction with us. Thank you for your understanding.

Regards,

Ethan Hua
TechNet Community Support