Agreed, what you want is virtual hosts, not subdomains.

Besides, even if you were to use subdomains, you’d still need to setup virtual hosts on Apache to serve them.

Subdomains are used to categorize a related set of servers/hostnames, for example, company.com might have a ‘newyork.company.com’ subdomain that lists their servers in their New York offices (mail.newyork.company.com, vpn.newyork.company.com, etc.) and a ‘london.company.com’ subdomain that does the same thing for the London offices (mail.london.company.com, vpn.london.company.com, etc.)
(there are others logicial breakdowns for subdomains, but geographic location is one of the commonest)

It sounds as though all you want to do is have another hostname in your domain.

Since your ISP handles your DNS, they should be able to add a host record very easily. Then you need to tell Apache what to do when a request for that hostname comes in.

Typically you’ll do this in the GUI tool for setting up the web server. Create a new virtual server with the new hostname you’ve chosen and choose the alternate folder to use as that site’s document root.