DHCP became a standard protocol in October 1993. Its current definition is described in RFC2131. It is based on BOOTP, which it expands by adding further options and it is backward compatible with it.

Basic terms:

DHCP client - Most commonly a personal computer that uses DHCP to acquire configuration parameters.

DHCP server - A device that replies to DHCP client requests by sending configuration parameters.

Address allocation mechanisms

A DHCP server has a total of three mechanisms that ensure the allocation of the correct IP address to a client. These mechanisms are:

1.Automatic allocation - assigns a permanent IP address to the client

2.Dynamic allocation - assigns an IP address to the client for a certain time period (or until the client relinquishes it himself)

3.Manual allocation - the client has a fixed address determined by the network administrator and the DHCP server is only a used as an intermediate to announce the address to the client

TCP/IP configuration process

The TCP/IP configuration process is composed of four steps, during which four DHCP messages are sent. Two messages are sent by the client and two by the server. These steps are:

DHCP Discover - the client sends a DHCPDISCOVER message that addresses one or more DHCP servers.

DHCP Offers - when the server receives a DHCPDISCOVER message from the client it replies with a DHCPOFFER message (offer). It contains the client's MAC address, followed by the IP address that the server is offering, the subnet mask, the time period after which the address will be invalidated and the IP address of the server that made this offer.

DHCP Request - when the client accepts the offer made by the server it must let it know that it has accepted the offer (so that the server can't make the same offer to a different client) by sending a DHCPREQUEST message. The client may receive offers from a practically unlimited amount of servers but it may only accept one, that's why it must reject the offers of all the other servers. This message contains its IP address.

DHCP Acknowledgment - when the DHCP server receives a DHCPREQUEST message from the client, the final configuration process is initiated. In this phase, the server confirms the parameters and sends them to the client in a DHCPACK message that contains the time period and all the configuration parameters that the client requested.

Parameter verification

When the client receives the DHCPACK with the configuration parameters, they should verify these parameters before the final setup of the computer (e.g. find out if the IP address is already in use by using the ARP protocol) and also note the time period after which the address becomes invalid (the client could request the renewal of the address if they are still connected to the Internet). If the client finds out that the address is already in use, they must send a DHCPDECLINE message to the server and the entire configuration process must be repeated (in this case the client should wait at least 10s before restarting the process to avoid excessive network traffic). Likewise, the entire process must be repeated if the client receives a DHCPNAK message from the server, which indicates an incorrect address (the same situation as with DHCPDECLINE, but the error is discovered by the server)

Use of DHCPINFORM

A DHCPINFORM message is used when an IP address has been assigned to the client using a method different from DHCP - e.g. manual configuration. This message may be used to assign only local parameters. The server thus saves time by not having to allocate the address, check if the address has already been assigned and send the yiaddr and time period.

Use of DHCPRELEASE

A DHCPRELEASE message is used when the client has decided to stop renewing their address and to change or completely discard it and disconnect from the network. The server frees up the address after receiving this message puts it on the list of available addresses.