DHCP reservations setup and it obtains the address and then it drops.

All computers are configured to obtain IP address automatically from dhcp.

These are the following stages the DHCP goes through when obtaining an IP address from the network.

• If a DHCP server cannot be found or does not respond after one minute, the DHCP client checks the settings on the Alternate Configuration tab of the properties of the TCP/IP protocol. If Automatic private IP address is selected, the DHCP client auto-configures its IP address and subnet mask by using a selected address from the Microsoft-reserved Class B network, 169.254.0.0, with the subnet mask 255.255.0.0. The DHCP client tests for an address conflict to ensure that the IP address is not in use on the network. If a conflict is found, the client selects another IP address. The client retries auto-configuration up to 10 times. If User Configured is selected, the DHCP client configures a static IP address configuration. The DHCP client tests for an address conflict to ensure that the IP address is not already in use on the network. If a conflict is found, the DHCP client indicates the error condition to the user.

When the DHCP client succeeds in selecting an address, it configures its network interface with the IP address. The client then continues to check for a DHCP server in the background every five minutes. If a DHCP server responds, the DHCP client abandons its selected IP address and uses the address offered by the DHCP server (and any other DHCP option information that the server provides) to update its IP configuration settings.