this was a support reply it was too good to not post.

Hi,

Here are some details regarding addon domain and parked domain.

Parked Domains
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Parked Domains are domains that point to the main domain account. Hence, if you own domain.com, you can park domain.net and domain.org so that if any of the 3 domains are looked up

Sub-Domains
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This is essentially something.yourdomain.com (hence the term "SUB" domain). Sub-domains have their own folder within your primary domains public_html directory so that whatever files are there are retrieved when you go to something.yourdomain.com. This is the document root for the sub-domain.


Addon-Domains
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At a glance this is essentially a second domain which you "add on" to your existing account. It, like a sub-domain, also goes to a sub folder of your primary public_html directory. It also has its own domain name associated with it. This feature allows you to have multiple websites using multiple domains on one cPanel account (depending on how many Addon-domains your hosting package allows for). What gets confusing is that an Addon-domain is actually not its own cPanel account entity; it is a combination of the two above (Sub-Domain linked to a Parked Domain).

To set up a domain which points to a sub domain you have to use addon domain.

The Addon Domain Maintenance menu allows you to add addon domains to your account. An addon domain allows you to reach a sub domain when entering the name of the addon domain into a browser. This means that you can host additional domains from your account, if allowed by your hosting provider.


Steps

1 To access the Addon Domain Maintenance menu, click on the addon domain icon above the words Addon Domains on the main screen of your cPanel interface.

2 Enter the name of the addon domain in the blank field next to New Domain Name:

3 Enter the name of the directory which contains the sub domain that the addon domain will point to in the blank field next to Username/directory/subdomain Name: (This directory will be the location for the addon domain's files, just as public_html is the location for your domain's files.)

4 Type in the password for the new addon domain, and click on Add Domain!

Please update the name server of the new domain with the same name servers of your host domain.