A DHCP Server assigns IP addresses to client computers. This is very often used in enterprise networks to reduce configuration efforts. All IP addresses of all computers are stored in a database that resides on a server machine.

A DHCP server can provide configuration settings using two methods

Address Pool

This method entails defining a pool (sometimes also called a range or scope) of IP addresses from which DHCP clients are supplied their configuration properties dynamically and on a fist come first serve basis. When a DHCP client is no longer on the network for a specified period, the configuration is expired and released back to the address pool for use by other DHCP Clients.