The DHCP (Dynamic Host Configuration Protocol) is a network protocol works on “Application layer” on OSI Model. DHCP use to assign an IP (Internet Protocol) address to the clients and establish network connection between server and client. DHCP works on UDP.

DHCP server works on port 67 allow in server firewall
DHCP Client works on port 68 allow in client firewall

Steps to install DHCP server on Linux Machine

# yum install dhcp
specify the network interface to allow run DHCP service such as eth0 or eth1 in this path

# vi /etc/sysconfig/dhcpd

# Command line options here    DHCPDARGS=eth1
now cp this conf file
# cp /usr/share/doc/dhcp-4.1.1/dhcpd.conf.sample /etc/dhcp/dhcpd.conf
open this file in any text editor

# vi /etc/dhcp/dhcpd.conf
make the changes as required to your domain name and IP range. 

save the file and restart dhcpd demon

#service dhcpd restart 
to start dhcp server automatically on every reboot run this command

#chkconfig dhcpd on