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Decide what range of IP addresses you would like to use. You should use a "Private IP Range", otherwise you may well have problems related to traffic to and from your network being routed incorrectly. For a simple LAN, stick with 192.168.0.100, a subnet mask of 255.255.255.0 and a pool size of 50. This will allow up to 50 machines to be set up on your network without having to change anything.
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Set the IP address of your computer to 192.168.0.2 with a subnet mask of 255.255.255.0 (an address in the same subnet as the addresses in the pool, but not an address in the pool itself!)
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Download dhcpd32 from http://tftpd32.jounin.net/
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Unzip the file to your computer and run dhcpd32.exe
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Set the "IP pool starting address" to the address you want the first computer to use DHCP to have. (192.168.0.100 if you're not sure!)
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Set the "Size of pool" to a little more than the number of computers and devices you think you'll need on your LAN. (if in doubt, 50 is a nice number)
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Leave the "Boot File" field blank
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If you have a DNS server on your network, or one accessible to the machines on your network, enter it's IP address in the "WINS/DNS Server" box. If you don't, or don't know what it means, leave it blank.
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Set "Mask" to your subnet mask. If you don't know what that is, follow my addressing scheme and set it to 255.255.255.0
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Leave the "Domain Name" and "Additional Option" boxes as they are.
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Press "Save".
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Your DHCP server is now set up!
