Is it possible to use Internet Connection Sharing with DHCP?

I know it is possible to share an internet connection with another pc using ip-forwarding and masquerade. **Is it possible to set up the sharing computer as a DHCP server, so the settings (ip, gateway, dns) get configured for the client automatically?** The current way I do it, is that I setup the client NICs manually to access the internet from the client. edit: this is the setup i plan to realize -