There are two ways a user can make sure that a client has the appropriate IP configuration parameters. One way is to manually configure the values through the operating system. In Windows®, a screen in the Network Settings allows entry of the IP address, subnet mask, default router, and DNS server. On the other hand, in the same window, the user can check the radio buttons to obtain these automatically. In this case, the dynamic host configuration protocol (DHCP) will be used. Figure 2 illustrates the process.
Figure 2: DHCP Process
To begin, the client sends a local broadcast indicating it needs service from a DHCP server. This frame is called a DHCP Discover. Typically, all DHCP servers that hear the broadcast will respond with a broadcast, which is called a DHCP Offer. The offer will contain the configuration parameters the client needs. More than one offer may be received since there may be multiple DHCP servers. The client chooses one of the offers by sending a broadcast called a DHCP Request. The servers that sent the offers that weren't accepted realize they are no longer part of the process. The server that made the accepted offer completes the assignment of the parameters by sending a broadcast called the DHCP Acknowledgement.
A little trick to remember the 4 step process is the name DORA - Discover, Offer, Request, Acknowledgment.
In the event that the DHCP server is on a different network than the client, the local router that separates their networks must know to forward DHCP broadcasts. This forwarding action is called DHCP relay and required since routers do not forward broadcasts.