DHCP is an acronym for Dynamic Host Configuration Protocol. The creation of DHCP has made configuring the network on multiple hosts extremely simple. Instead of having to configure each host separately, you can assign all of the common host-used parameters with a DHCP server.
Each time the host boots up, it will broadcast a packet to the network. This packet is a call to any DHCP servers located on the same segment to configure the host.
DHCP is extermely useful in assigning items such as the IP address, Netmask, and gateway of each host.