Add hosting for the domain through the panel and then the domain will be tied to your account, anyone else that tries to add a domain or sub-domain on another account will get an error message that they can't add the domain.
Sometimes a domain will already exist on an account because someone else hosted or planned to host it at dreamhost previously, in that case you try to add the domain and you will get the error that the domain can't be added to your account. The only way to clear that up is to open a ticket with support so they they can free the name up for you and get it added to your account.
In simplest term CNAME is like an alias. for example you could create a CNAME record for domain1.com to alias domain2.com then when a user typed domain1.com into there browser bar they would be pointed to domain2.com http://en.wikipedia.org/wiki/CNAME_record