169.254.x.x is known as an Automatic Private IP Addressing (APIPA) address. As of Windows Vista, ALL devices must have an IP address so Windows can’t find a DHCP server and you do not force a static address, it will automatically assign itself a 169.254.x.x address.
If you find that your Windows Server is showing a 169.254.x.x address as the name of your DHCP server when you launch the DHCP applet, it means that the DHCP server is somehow hooked to a NIC with an APIPA address and you have three ways to fix it:
Option 2: Disable all of the NIC’s you are NOT using.
Option 3: Open a CMD (ADMIN) prompt and run: netsh int ip reset
After all of these options, you likely need to reboot the server to clear the caches and have the change take hold.
The solution for me was OPTION 2, disable the unused NICs, but as you can see in the screenshot I had a really weird situation. If I launched the DHCP applet from Server Manager, it would show the host name like it is supposed to.
I had it fixed but found I THIS MS post does a good job of discussing this DHCP issue if you want more information.