Yes, the parent domain will have to be added to the DreamHost system before the sub-domain can be added, you can do this in the panel at Domains -> Manage Domains -> Add New Domain / Sub-Domain. This will not affect the parent domain that is hosted elsewhere, you will just have an unused directory in your DreamHost home directory with the same name as the parent domain.
After you have added the parent domain and the sub-domain to DreamHost system, you will need to create a DNS A-Record for the sub-domain using whatever configuration utility your registrar provides. The IP address you need for this A-Record can be found by going to Domains -> Manage Domains, clicking the DNS link next to the parent domain and looking for the A-Record that was automatically added for the sub-domain.
As miv3 said, this IP address can change at any time, so you will need to stay on top of this and change the A-Record at your registrar whenever this happens. Although, in reality it is not likely to happen often.
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