Configuring dnsmasq on OpenWRT has a few peculiarities. First, enable the dnsmasq internal TFTP server by editing /etc/config/dhcp:

  config dnsmasq
  option domainneeded     1
  option boguspriv        1
  option filterwin2k      '0'  #enable for dial on demand
  option localise_queries 1
  option local    '/lan/'
  option domain   'lan'
  option expandhosts      1
  option nonegcache       0
  option authoritative    1
  option readethers       1
  option leasefile        '/tmp/dhcp.leases'
  option resolvfile       '/tmp/resolv.conf.auto'
  #list server            '/mycompany.local/1.2.3.4'
  #option nonwildcard     1
  #list interface         br-lan
  #list notinterface      lo
  option 'enable_tftp' '1' 
  option 'tftp_root' '/tftpboot' 
  
  <snip>
	  

Having dnsmasq send the rigth boot files

When the machine boots and the PXE stack asks the DHCP server for a file to boot, it should be ordered to fetch undionly.kpxe. But when that file has been loaded into memory and it in turn asks the DHCP server which file to use for its configuration, it should be orderen to fetch script output from the HTTP server. We edit edit /etc/dnsmasq.conf (see theKelleys.org example) to accomplish that:

  <snip>
  dhcp-match=gpxe,175
  dhcp-boot=net:#gpxe,undionly.kpxe
  dhcp-boot=http://1.2.3.4/boot/boot.php
	  

Avoiding rearranging of information in DHCP replies

Dnsmasq rearranges DHCP packages by default, but that is incompatible with gPXE. Running dnsmasq with then dhcp-no-override option cancels that behaviour, so we edit /etc/init.d/dnsmasq (see etherboot docs) and add the option:

  <snip>
  include /lib/network
  scan_interfaces
  config_load dhcp

  args="--dhcp-no-override"
  config_foreach dnsmasq dnsmasq
  config_foreach dhcp_host_add host
  config_foreach dhcp_boot_add boot
  config_foreach dhcp_mac_add mac
  <snip>
	  

... and reboot