In the Web Admin Panel go to Domains -> Manage Domains
Click on Add New Domain / Sub-Domain
Enter your full sub-domain name where it says Domain to host: (ie: test.mydomain.com).
If another user is to own this domain, select that user using the FTP user / CGI-runs-as user: dropdown.
Click Fully host this domain now!
After following these steps, a new sub-directory should appear in your home directory with the same name as your sub-domain, this is where you put the site files for the sub-domain.
Note: It can take a little while before your sub-domain is accessable.
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