The DHCP Address Allocation Process
A Cisco CCNA and CCNP Certification Exam Review
By Chris Bryant, CCIE #12933
As a CCNA and future CCNP, you're familiar with the basic purpose of DHCP and the basic process a host goes through in order to get an IP address from a DHCP server... but let's review it anyway!
The initial step has the DHCP client sending a broadcast packet, a DHCPDiscover packet, that allow the host to discover where the DHCP servers are. 
The DHCP servers that receive that DHCPDiscover packet will respond with a DHCPOffer packet. This packet contains an IP address, the time the host can keep the address (the "lease"), a default gateway, and other information as configured by the DHCP server admin.

If the host receives DHCPOffer packets from multiple DHCP servers, the first DHCPOffer packet received is the one accepted. The host accepts this offer with a DHCPRequest packet, which is also a broadcast packet.

All DHCP servers that sent DHCPOffer packets will receive the DHCPRequest packet. If the IP address they offered the client is not seen in the DHCPRequest, that server will return that particular IP address back to the DHCP address pool. The DHCP server whose offered IP address is being accepted sends a unicast DHCPAck (for "acknowledgement") back to the host.

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