Dynamic Host Control Protocol is a TCP/IP protocol that enables assignment of temporary IP address at host automatically when the host connects to the network. Dynamic allocation makes it possible to share a relatively small number of ip addresses within a relatively large population. But it is stateful, meaning it must store the different IP addresses and the host these use, plus it keep track of the state by sending keepalive mesages. Therefore, true plug and play configuration is difficult.

But DHCP also has substansial benefits, because it can provide hosts not only addresses but also basic network services information, such as the DNS address. In IPv4, DHCPv6 functions largely similiar but adds substansial benefits. In IPV6, autoconfiguration is handled without DHCP. Still, DHCPv6 is needed to learn about other network details such as DNS and SMTP server address.

source : http://www.6diss.org/