DHCP(Dynamic Host Communication Protocol)

History
RFC 1531 initially defined DHCP as a standard-track protocol in October 1993, succeeding the Bootstrap Protocol (BOOTP). The next update, RFC 2131 released in 1997 is the current DHCP definition for Internet Protocol version 4 (IPv4) networks. The extensions of DHCP for IPv6 (DHCPv6) were published as RFC 3315.

Technical overview
Dynamic Host Configuration Protocol automates network-parameter assignment to network devices from one or more fault-tolerant DHCP servers. Even in small networks, DHCP is useful because it can make it easy to add new machines to the network.

When a DHCP-configured client (a computer or any other network-aware device) connects to a network, the DHCP client sends a broadcast query requesting necessary information from a DHCP server. The DHCP server manages a pool of IP addresses and information about client configuration parameters such as default gateway, domain name, the DNS servers, other servers such as time servers, and so forth. On receiving a valid request, the server assigns the computer an IP address, a lease (length of time the allocation is valid), and other IP configuration parameters, such as the subnet mask and the default gateway. The query is typically initiated immediately after booting, and must complete before the client can initiate IP-based communication with other hosts.

Depending on implementation, the DHCP server may have three methods of allocating IP-addresses:

dynamic allocation: A network administrator assigns a range of IP addresses to DHCP, and each client computer on the LAN has its IP software configured to request an IP address from the DHCP server during network initialization. The request-and-grant process uses a lease concept with a controllable time period, allowing the DHCP server to reclaim (and then reallocate) IP addresses that are not renewed (dynamic re-use of IP addresses).
automatic allocation: The DHCP server permanently assigns a free IP address to a requesting client from the range defined by the administrator. This is like dynamic allocation, but the DHCP server keeps a table of past IP address assignments, so that it can preferentially assign to a client the same IP address that the client previously had.
static allocation: The DHCP server allocates an IP address based on a table with MAC address/IP address pairs, which are manually filled in (perhaps by a network administrator). Only requesting clients with a MAC address listed in this table will be allocated an IP address. This feature (which is not supported by all routers) is variously called Static DHCP Assignment (by DD-WRT), fixed-address (by the dhcpd documentation), DHCP reservation or Static DHCP (by Cisco/Linksys), and IP reservation or MAC/IP binding (by various other router manufacturers).

Technical details
DHCP uses the same two ports assigned by IANA for BOOTP: 67/udp for the server side, and 68/udp for the client side.

DHCP operations fall into four basic phases: IP discovery, IP lease offer, IP request, and IP lease acknowledgment.

DHCP servers which are in the same subnet has all the 4 messages as broadcast whereas if DHCP server is in different subnet than 1,3 messages are broadcast and 2,4 messages are unicast (via router *read DHCP relay (viral gadha))