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DHCP supports three mechanisms for IP address allocation. In "automatic allocation", DHCP assigns a permanent IP address to a client.
The process that describes DHCP is what I like to call "DORA" and here's the explanation
Discover
The host will initially send a broadcast in an attempt to discover a DHCP server on the network.
Offer
The DHCP server will 'see' the workstation looking for the DHCP service and respond with an 'offer', which is an IP address.
Request
The client will receive the 'offer' and, in most cases, will accept it. This means it sends an 'official request' for the same IP address offered previously by the server.
Accept
The DHCP server will complete the transaction by sending an 'accept' message and marking the particular IP address for the specific host