Dnsmasq is lightweight, easy to configure DNS forwarder and
DHCP server. It is designed to provide DNS and, optionally,
DHCP, to a small network. It can serve the names of local
machines which are not in the global DNS. The DHCP server
integrates with the DNS server and allows machines with
DHCP-allocated addresses to appear in the DNS with names
configured either in each host or in a central configuration
file. Dnsmasq supports static and dynamic DHCP leases and BOOTP
for network booting of diskless machines. 

Dnsmasq is targeted at home networks using NAT and connected to
the internet via a modem, cable-modem or ADSL connection but
would be a good choice for any small network where low resource
use and ease of configuration are important. 

WWW: http://www.thekelleys.org.uk/dnsmasq/doc.html