DHCP is an acronym standing for "Dynamic Host Configuration Protocol." It is a communications protocol that exists among network computers which allows them to automatically exchange networking parameters. DHCP is used quite extensively on the largest network of all, the Internet. Thanks to DHCP, there is little need for system administrators to update these parameters manually.
Depending on the network, there may be many DHCP servers. These servers maintain client configuration parameters, e.g., IP addresses, domain names, default gateways, etc. When a client device is connected to the network, it broadcasts a DHCP request in order to obtain such information for it to use.
DHCP client software is built into the Windows operating system, so whenever a Windows computer connects to a network it engages in a "conversation" with a DHCP server (perhaps through "relay agents"). The client computer then automatically uses the information obtained in this conversation in order to join the network.
This tip (9985) applies to Windows 7, 8, and 10.
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