A subdomain is a subsection of your website that can exist as a new website without a new domain name. Use subdomains to create memorable URLs for different content areas of your site. For example, you can create a subdomain for your blog that is accessible through blog.example.com and www.example.com/blog
You can see Subdomains tool under DOMAINS section in your cPanel as shown in the image above.
You can login to the Subdomains tool and then you will be redirected to a page like this:-
You can provide the subdomain name in the textbox for Subdomain, select the domain name for which you need to create the subdomain in the Domain list just below Subdomain as:-
After that Document Root will be generated automatically. If you wish you can change it to any folder in your cPanel File Manager. But I prefer to keep it in the default directory allocated by the system.
Just press the create button and your subdomain will be created.