|Linux PPP HOWTO|
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The /etc/ppp/pap-secrets file looks like
# Secrets for authentication using PAP # client server secret acceptable_local_IP_addresses
The four fields are white space delimited and the last one can be blank (which is what you want for a dynamic and probably static IP allocation from your ISP).
Suppose your ISP gave you a user name of fred and a password of flintstone you would set the name fred option in /etc/ppp/options[.ttySx] and set up your /etc/ppp/pap-secrets file as follows
# Secrets for authentication using PAP # client server secret acceptable local IP addresses fred * flintstone
This says for the local machine name fred (which we have told pppd to use even though it is not our local machine name) and for ANY server, use the password (secret) of flintstone.
Note that we do not need to specify a local IP address, unless we are required to FORCE a particular local, static IP address. Even if you try this, it is unlikely to work as most PPP servers (for security reasons) do not allow the remote system to set the IP number they are to be given.