How IP Helper Address Works

Using the ip helper-address command sets up a DHCP relay. DHCP only works on the LAN to which it is connected because it uses broadcast, which cannot cross a router. To remedy that situation, DHCP relay was created. It gives DHCP an option so that a router intercepts the DHCP client's broadcast request, creates a unicast request to the DHCP server on a different LAN, and the DHCP server can give a unicast response to the router based on the DHCP option, that then passes on the DHCP response to the requesting DHCP client.