Can DNS and DHCP both be on one server?

Absolutely. If you are running a Windows server, configure the DNS and DHCP Server settings in [Start] [Administrator Programs]. If you have a *nix server, configure the named and dhcpd daemons.

In either case, if you are running a single-server scenario, there are many advantages to running both DHCP and DNS on the same box. For example, if your local domain is set to something like "example.local", your PCs in the network would have names like accounting.example.local, server.example.local, and so on. By having both services configured together, you will be able to address your local network by the computer name ("accounting" or "ScottsDesktop", etc), without the "example.local".

If you are running Small Business Server, I think you *must* use both DNS and DHCP on that server, integrated into Active Directory.