Select which primary domain you want the subdomain to be on
Edit or Update the Document Root if desired (This is the folder your files will live)
Click the Create button
Once the subdomain has been created there will
be a new sub-directory in your public_html folder bearing the name set as the document root. Upload the index page for your subdomain to that
folder.
As far as relative paths are concerned the sub-directory containing the
subdomain will be handled as if it were the root web accessible
directory on a separate account when accessed via the subdomain URL
(subdomain.domain.com).
While the content within the folder can be accessed via either http://subdomain.domain.com and http://domain.com/subdomain
any image or link tags which are set to call files using relative paths
would be expected to function using the subdomain URL and fail calling
the subdomain via it's actual "true" URL (http://domain.com/subdomain).