DHCP server doesn’t receive DHCPREQUEST packet sent by client

It has no IP before it has an IP.

An example DHCP Discover packet sets the source IP to 0.0.0.0 and the destination is 255.255.255.255 to broadcast to every host on the local net.

The reply from the server goes to the client's MAC address. When you say All I know about is the client's MAC address - that's all the DHCP server knows about as well, and that's enough.

However, there is a standard for hosts to assign themselves an IP, which usually happens if a DHCP request fails. These IPs are in the 169.254.0.0/16 range.

http://packetlife.net/blog/2008/sep/24/169-254-0-0-addresses-explained/

When a host fails to dynamically acquire an address, it can optionally assign itself a link-local IPv4 address in accordance with RFC 3927. Microsoft's term for this is Automatic Private Internet Protocol Addressing (APIPA).

So it's possible a host has a self-assigned link-local address if it has tried DHCP before and failed to get an address, and is now trying DHCP again.

(And this has nothing to do with DNS)

You are getting an offer from your DHCP server, but when you try to request the address the other DHCP server jumps in and NAKs it. It can do that because the client is broadcasting the request.

It's quite likely that it's VMware Player itself trying to manage DHCP for you. Anyway, you have the IP of the problem DHCP server (192.168.117.254) to help you track it down.