How to create a subdomain

How To Create A Subdomain
I read the help article for the subject of creating a subdomain at dreamhost wiki.

What I am trying to figure or want to make sure if i creat it correctly.

For example. My domain name is I would like to add new as the subdomain.

When i select add new domain or subdomain do i just type in the word new for the subdomain or do I need to type in to add the the new subdomain.

When the subdomain is created how is it a part of my main domain

Thanks in advance