|What I want to do is assign a static IP for a server that runs DHCP and DNS.|
This is smart. Anything that provides a service (like a server) should always have a static IP address.
So I need to disable the DHCP and DNS on my router so that the server handles everything.
Good thinking as you don't want either enabled on two machines at once. However, since I firmly believe in "if it ain't broke, don't fix it" I have to wonder why you would want to do this if the present setup is working??
1) Always, always ALWAYS use static IP's for servers, network printers, network appliances like switches and routers.........ALWAYS
2) Only if you change it. If you're not creating an Active Directory integrated windows domain, I wouldn't change anything.