Probably not. If this is MS DHCP and both scopes are on the same subnet then the DHCP discovery process is based on finding the DHCP server it can connect with first - splitting DHCP scopes on the same subnet is a bit pointless as the clients will connect to the server that responds the fastest - so load balancing is not achieved. DHCP discovery for a client is based on sending out discovery packets on the LAN and if a DHCP server exists, it then responds - if you have multiple DHCP servers on the same LAN then it is which DHCP server responds first - this could be influenced by simple factors such as utilisation of the server, location on the network ..etc. The scenarion is best implemented across subnets - so in the event of a DHCP server failure the clients DHCP discovery packets will be routed to the other DHCP server - this assumes that bootP forwarding is configured on the routers to handle this traffic.

Have both DHCP servers been authorised and their scopes active?

Is DNS configured so that when the clients get a DHCP address it is then registered in DNS ? - If their primary DNS server is DC1 then that would explain it.

You could test the scenario by deactivating the scope on the 1st DHCP server and do an ipconfig release and then renew on a pc and see if it gets an ip address from the vm DHCP server.

It could also be that as DC1 is the primary DNS server for the clients that they are doing name resolution at that server and it hosts the DHCP service as well - another option would be to try relocating the DHCP service to a member server - but as i said, 2 DHCP servers on the same LAN segment won't provide load balancing.