A sub-domain is a way to handle authority to another administration. Setting a sub-domain involves mostly telling where is the DNSs managing this sub-domain. This is a two steps process. You must first define which machines are managing the sub-domain and next, you must gives the IP number of those machines if they are part of the sub-domain. A DNS of a domain need not be part of the domain it is managing.
Some facts first...
You do...
DNS advertising
enter dns.sub.foo.com
and ftp.sub.foo.com.Now your DNS knows two things: Which machine(s) is(are) responsible for the sub-domain sub.foo.com, and, how to reach it. This information combination is often refer-ed to as the glue record.
It is not necessary to setup a complete sub-domain just to have
a sub-category of machine. Suppose that for a project, you want to
refer to two machines as ftp.project.foo.com and www.project.foo.com,
you can simply defines theses machines IP using the host information
screen. The information will be dispatched in the foo.com
database.