What are DHCP and DNS servers

DHCP Server alots the IP addresses to computers, while DNS server resolves them.

You need DHCP Server if you do not want to manually maintain IP Addresses or
you have less IP Addresses than number of machines you have, as dynamic DHCP Server will
recycle IP Addresses on machines.

DNS Server is needed for resolving hostnames to their IP addresses. Normally your
ISP will provide you with DNS Service. You may have your own DNS Server, which will
resolve hostnames by forwarding them to ISP's DNS Server and cache the addresses also.

Why use a combined DHCP DNS Server

If you have home/small office network with Unix/Linux machines, these machines will
not be resolved from each other, as Unix/Linux machines do not support NBNS protocol
and you need your own DNS Server. But how about resolving your local machines ?. Your ISP's
DNS Server will not have this list and your own DNS Server wont have them either. Most
DNS Servers cannot do this.(unless you configure dynamic updates, or use static IP addresses
and manually enter them).

This server resolves dhcp alloted local machines automatically in addition to external
hosts, with the added advantage being both dhcp and dns server are allways in sync.
Also there is no need to create and maintain cumbersome zone files.

You can also use this server as DHPC Server only or DNS Server only.
Dual DHCP DNS Server is an Open Source Freeware