A DHCP server allots a dynamic IP number. The DHCP server has a group of IP addresses which can serve the purpose. It provides IP addresses to systems linked to the internet as they are connected to the network. These IP addresses are providing temporary in nature (this is why it is termed as dynamic), and this provisional period is identified as a lease. After some time the system should renew its lease, and possibly acquire a different IP address. The DHCP server confirms that no two system has a similar IP address, therefore prevents the conflict of data communication.
For more info: DHCP role