A DHCP server on a Cisco router

Step by step

1. Exclude the addresses you will set by hand (the router, servers, printers): ip dhcp excluded-address FIRST LAST.
2. Create a pool: ip dhcp pool NAME. The prompt changes to (dhcp-config)#.
3. network 192.168.10.0 255.255.255.0: which addresses the pool hands out.
4. default-router 192.168.10.1: the gateway clients use (the router's LAN address).
5. dns-server, and optionally domain-name and lease DAYS [HOURS [MINUTES]] (default one day).

In NetLab

▶ R1
R1>enable
R1#configure terminal
Enter configuration commands, one per line.  End with CNTL/Z.
R1(config)#ip dhcp excluded-address 192.168.10.1 192.168.10.9
R1(config)#ip dhcp pool LAN10
R1(dhcp-config)#network 192.168.10.0 255.255.255.0
R1(dhcp-config)#default-router 192.168.10.1
R1(dhcp-config)#dns-server 192.168.10.5
R1(dhcp-config)#domain-name corp.local
R1(dhcp-config)#lease 2
R1(dhcp-config)#end
*Mar  1 00:00:34.000: %SYS-5-CONFIG_I: Configured from console by console
▶ PC2
student@PC2:~$ sudo dhclient eth0
student@PC2:~$ ip addr show eth0
2: eth0: <BROADCAST,MULTICAST,UP,LOWER_UP> mtu 1500 qdisc fq_codel state UP group default qlen 1000
    link/ether 00:1a:f2:3a:a4:ee brd ff:ff:ff:ff:ff:ff
    inet 192.168.10.10/24 brd 192.168.10.255 scope global dynamic eth0
       valid_lft 172799sec preferred_lft 172799sec
    inet6 fe80::21a:f2ff:fe3a:a4ee/64 scope link 
       valid_lft forever preferred_lft forever
student@PC2:~$ ip route
default via 192.168.10.1 dev eth0 proto dhcp src 192.168.10.10 metric 100 
192.168.10.0/24 dev eth0 proto dhcp scope link src 192.168.10.10 metric 100 
▶ R1
R1#show ip dhcp pool

Pool LAN10 :
 Utilization mark (high/low)    : 100 / 0
 Subnet size (first/next)       : 0 / 0 
 Total addresses                : 254
 Leased addresses               : 1
 Excluded addresses             : 9
 Pending event                  : none
 1 subnet is currently in the pool :
 Current index        IP address range                    Leased/Excluded/Total
 192.168.10.11        192.168.10.1     - 192.168.10.254      1     / 9     / 254
R1#show ip dhcp binding
Bindings from all pools not associated with VRF:
IP address          Client-ID/              Lease expiration        Type
                    Hardware address/
                    User name
192.168.10.10       0100.1af2.3aa4.ee       Mar 03 1993 12:00 AM    Automatic

PC2 got 192.168.10.10: the first address that isn't excluded. On Linux the dynamic word and the valid_lft countdown show the address came from DHCP.

Common mistake: The excluded-address command is global, not inside the pool. And the pool's default-router must be the router's address on that LAN: a typo there gives every client a gateway that doesn't exist.

Tip: show running-config | section dhcp shows the whole DHCP configuration at once.