Once the client boots to PXE  (which we have explained in Part I ) the clients goes to the management point and get the list of policy.
If any Mandatory (required) deployment then it will go ahead with that else if it is available deployment it will show you the List of advertisement.
 From the WindowsPE and  before HDD format the sequence of events is logged in SMSTS.log in the location   x:\windows\temp\smstslog\smsts.log


 The snippet below shows which policy are retrieved which policy is downloaded and from where.  SMSTS.log are usually pretty big.
I will be pointing only the required lines rest I will attach in a ZIP file which you can look in detail.
Preparing Policy Assignment Request. TSPxe 20-09-2013 18:53:22 1244 (0x04DC)
    Setting transport. TSPxe 20-09-2013 18:53:22 1244 (0x04DC)
    Setting site code = LAB. TSPxe 20-09-2013 18:53:22 1244 (0x04DC)
    Setting client ID = 0496841d-c8ba-4215-bc34-94da8ad4cd12. TSPxe 20-09-2013 18:53:22 1244 (0x04DC)
   Setting site signing Certificate. TSPxe 20-09-2013 18:53:22 1244 (0x04DC)
Setting SiteSigningCertificateContext TSPxe 20-09-2013 18:53:22 1244 (0x04DC)
Executing Policy Assignment Request. TSPxe 20-09-2013 18:53:22 1244 (0x04DC)
Sending RequestAssignments TSPxe 20-09-2013 18:53:22 1244 (0x04DC)
Setting message signatures. TSPxe 20-09-2013 18:53:22 1244 (0x04DC)
Setting the authenticator. TSPxe 20-09-2013 18:53:22 1244 (0x04DC)
CLibSMSMessageWinHttpTransport::Send: URL: CM2012SP1.sudilab.com:80  CCM_POST /ccm_system/request TSPxe 20-09-2013 18:53:22 1244 (0x04DC)
Request was succesful. TSPxe 20-09-2013 18:53:22 1244 (0x04DC)
::DecompressBuffer(65536) TSPxe 20-09-2013 18:53:22 1244 (0x04DC)
Decompression (zlib) succeeded: original size 25716, uncompressed size 120828. TSPxe 20-09-2013 18:53:22 1244 (0x04DC)
Request client ID: 0496841d-c8ba-4215-bc34-94da8ad4cd12 TSPxe 20-09-2013 18:53:22 1244 (0x04DC)
Response client ID: 0496841d-c8ba-4215-bc34-94da8ad4cd12 TSPxe 20-09-2013 18:53:22 1244 (0x04DC)
Retrieving Policy Assignments: TSPxe 20-09-2013 18:53:22 1244 (0x04DC)
    Processing Policy Assignment {42a5d36c-1a04-4171-a34a-7d1ba6896d49}. TSPxe 20-09-2013 18:53:22 1244 (0x04DC)
    Processing Policy Assignment {6d4fd9bd-f9a8-4225-bd76-84e25e99ea39}. TSPxe 20-09-2013 18:53:22 1244 (0x04DC)
    Processing Policy Assignment {4bf211e4-461e-495c-aae1-cf47a73b95b2}. TSPxe 20-09-2013 18:53:22 1244 (0x04DC)
   
     ...........................
     ..............................    
    Processing Policy Assignment {adcfd522-f142-4aad-becc-a591eea01bd1}. TSPxe 20-09-2013 18:53:22 1244 (0x04DC)
    Processing Policy Assignment LAB20000-LAB00003-3B5BFFE2. TSPxe 20-09-2013 18:53:22 1244 (0x04DC)
    Processing Policy Assignment SRC10000. TSPxe 20-09-2013 18:53:22 1244 (0x04DC)
    Processing Policy Assignment DEP-LAB20002-LAB00002-6F6BCC28. TSPxe 20-09-2013 18:53:22 1244 (0x04DC)
    Processing Policy Assignment DEP-LAB20002-LAB00004-6F6BCC28. TSPxe 20-09-2013 18:53:22 1244 (0x04DC)
    Processing Policy Assignment DEP-LAB20002-LAB0000A-6F6BCC28. TSPxe 20-09-2013 18:53:22 1244 (0x04DC)
Successfully read 43 policy assignments. TSPxe 20-09-2013 18:53:22 1244 (0x04DC)
Downloading policy body LAB20002-LAB0000B-6F6BCC28. TSPxe 20-09-2013 18:53:22 1244 (0x04DC)
Preparing Policy Body Request. TSPxe 20-09-2013 18:53:22 1244 (0x04DC)
    Setting transport. TSPxe 20-09-2013 18:53:22 1244 (0x04DC)
    Setting policy location = http:///SMS_MP/.sms_pol?LAB20002-LAB0000B-6F6BCC28.1_00. TSPxe 20-09-2013 18:53:22 1244 (0x04DC)
Executing Policy Body Request. TSPxe 20-09-2013 18:53:22 1244 (0x04DC)
CLibSMSMessageWinHttpTransport::Send: URL: CM2012SP1.sudilab.com:80  GET /SMS_MP/.sms_pol?LAB20002-LAB0000B-6F6BCC28.1_00 TSPxe 20-09-2013 18:53:22 1244 (0x04DC)
Request was succesful. TSPxe 20-09-2013 18:53:22 1244 (0x04DC)

 You would also see the Network account policy which will be used to contact DP also being downloaded and evaluated

Reading Policy Body. TSPxe 20-09-2013 19:01:48 1336 (0x0538)
Parsing Policy Body. TSPxe 20-09-2013 19:01:48 1336 (0x0538)
Found NetworkAccessUsername/NetworkAccessPassword from NAAConfig CCM_NetworkAccessAccount TSPxe 20-09-2013 19:01:48 1336 (0x0538)
Network Access Account has a non-empty value TSPxe 20-09-2013 19:01:48 1336 (0x0538)
Getting local network information. TSPxe 20-09-2013 19:01:48 1336 (0x0538)
It will then check for all the content location for reference package you would find multiple occurrence of location request as below related to content reply .
If any issues with content lookup the TS would fail here and in such situations you would need to check the packages\application\boot images\OS image etc is distributed the DP which the client is assigned to.
 Request was succesful. TSPxe 20-09-2013 19:01:48 1336 (0x0538)
::DecompressBuffer(65536) TSPxe 20-09-2013 19:01:48 1336 (0x0538)
Decompression (zlib) succeeded: original size 547, uncompressed size 1690. TSPxe 20-09-2013 19:01:48 1336 (0x0538)
Location Reply: http://CM2012SP1.sudilab.com/SMS_DP_SMSPKG$/LAB00004