dnsmasq not responding to dhcp requests

Hi. I am attempting to get dnsmasq to work (latest package & compiled from source), for some reason it doesnt respond to dhcp requests, dns works fine. Currently I have named being updated from dhcpd but this is not a simple configuration. I am hoping to get dnsmasq to work. I have changed default config lines..

dhcp-range=192.168.174.50,192.168.174.150,12h
log-queries

and started it using dnsmasq -d -q
and then do a renew from the windows computer and i get no log information relating to dhcp, only dns requests..
this is the output..

[root@frodo ~]# dnsmasq -d -q
dnsmasq: started, version 2.30 cachesize 150
dnsmasq: compile time options: IPv6 GNU-getopt no-ISC-leasefile DBus no-I18N
dnsmasq: DHCP, IP range 192.168.174.50 -- 192.168.174.150, lease time 12h
dnsmasq: reading /var/run/ppp/resolv.conf
dnsmasq: using nameserver 218.214.228.97#53
dnsmasq: using nameserver 218.214.17.1#53
dnsmasq: read /etc/hosts - 4 addresses
dnsmasq: query[AAAA] www.comics.com from 192.168.174.2
dnsmasq: forwarded www.comics.com to 218.214.17.1
dnsmasq: forwarded www.comics.com to 218.214.228.97
dnsmasq: query[AAAA] www.comics.com.localdomain from 192.168.174.2
dnsmasq: forwarded www.comics.com.localdomain to 218.214.228.97
dnsmasq: query[A] www.comics.com from 192.168.174.2
dnsmasq: forwarded www.comics.com to 218.214.228.97
dnsmasq: reply www.comics.com is 65.114.4.69

Anyone have any tips, i cant find anything on the internet about how to get this going..