EDIT: Put this question on hold for a sec, I think I might've figured it out.
I've never really used FTP before, so I have no idea. FileZilla keeps giving me "Connection timed out, could not connect to server" errors, so I'm suspecting my setup isn't right. I also tried WebFTP and it also tells me it can't connect.
I've setup a subdomain from an outside registrar (GoDaddy) and I added the subdomain to DreamHost's Domains Hosted section (fully hosted). Now I don't know if there's anything else I need to do to make this work. I've already waited for a day for changes to take place. Not sure if this affects anything, but my second-level domain isn't on DreamHost yet since I don't want to close my old site until I can get it working on DreamHost.