A subdomain is a domain that is part of the primary domain! For instance: letsforum.com is my primary domain name, lets pretend I want to create a subdomain internetmarketing, so the final URL will look like this: internetmarketing.letsforum.com
To create a subdomain log into your webhosting control panel and go to domain center there look for create or add subdomain. You have to ask you hosting provider for how to create a subdomain as the steps to create one vary from one webhosting to another