Option 2 is for situations where you already have a domain registered elsewhere, but wish to host that domain with Dreamhost, while still leaving the domain registration where it currently is. To do this you will need to configure the domains DNS for the Dreamhost DNS servers.
Option 3 is for situations where you already have a domain registered elsewhere, but wish to host the domain with Dreamhost AND transfer the registration to Dreamhost.
I do not believe this is possible with the shared hosting plans.
It is not a rebate, it is a once only discount that comes directly off your first payment.
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