Relay agents are used to forward requests and replies between clients and servers when they are not on the same physical subnet. Relay agent forwarding is distinct from the normal forwarding of an IP router, where IP datagrams are switched between networks somewhat transparently. Relay agents receive Dynamic Host Configuration Protocol (DHCP) messages and then generate a new DHCP message to send out on another interface.
The 2950, 3500 XL, 2900XL switches cannot be configured as a DHCP helper, or DHCP relay. This requires a router or a switch with a Layer 3 capability that can do InterVLAN routing. These switches are Layer 2 devices, which can only do DHCP snooping.
The ip helper-address command is present on a configurable Layer 3 interface. The general rule is to configure the command on the Layer 3 interface closest to the client.
In order configure a Cisco Catalyst switch to act as a DHCP relay agent, issue the ip helper-address command in interface configuration mode and specify the IP address of the DHCP server on the remote subnet.
This ensures that all DHCP broadcasts are forwarded to that address. More than one helper address can be configured per interface.