A DHCP relay agent is used to allocate IP addresses to end devices that are outside the LAN. This is not common practice; it simply does not make sense to assign an IP address to a device across a wide area network. But there may be a situation where a relay agent is needed.
Routers by default do not accept broadcast addresses, and that is exactly what happens when a device wakes up on the LAN and requests an IP address.
We must keep in mind the process of DORA, the letter D stands for Discover, and it's broadcasting that it needs an IP address.
Since no local DHCP exists, the request is directed to the gateway, which is your router, and when it sees a broadcast coming its way, it will drop that packet. This only happens if you are in a different LAN segment; if you are in the same LAN, then you don't have to worry about that.
So, in a router you would configure...
