The Dynamic Host Configuration Protocol (DHCP) provides a framework for passing configuration information to hosts on a TCPIP network. DHCP allows a computer to join an IP-based network without having a pre-configured IP address. DHCP assigns unique IP addresses to devices, then releases and renews these addresses as devices leave and re-join the network. DHCP parameters include the IP address, subnet mask, default gateway and DNS addresses.
Link to RFC 2131
Link to Wikipedia