DHCP handshake

DHCP handshake occurs in the following sequence:

DHCP client broadcasts a DHCPDISCOVER message. The message is directly received or forwarded to DHCP server by routers or DHCP relay agents.
DHCP server responds with a broadcasted DHCPOFFER message offering an IP address to the client.
DHCP client chooses an IP from multiple DHCPOFFERs' as the case may be and broadcasts DHCPREQUEST. It is an implicit deny to the DHCP servers whose offered IP address is not chosen.
DHCP server sends a DHCPACK message to the client. If the address is no longer available (already allocated or wrong subnet) servers replies with DHCPNAK. In case of DHCPNAK, client re-initiates the process.
DHCP client can send a DHCPDECLINE to the server, in case IP is not suitable. e.g if is already in use. It will restart the process in such a case.
DHCP client may also release an IP using DHCPRELEASE prior to the expiration of the lease period.