Help understanding "SubServers"

Hi Everyone,

We just purchased Virtualmin for use with hosting our domains and we're having a bit of trouble figuring out how subservers work and what exactly one would use them for?

Can someone help us understand this? I've used DirectAdmin in the past and they use "subdomains" (example subdomain.domain.com) but I figured I would just manually create a DNS entry for test.domain.com and setup my virtual server with an alias that responds to that for that domain, yes?

Thanks