What Is A The Difference Between An Add-on Domain And A Sub-domain?

To clarify the meaning behind a sub-domain and add-on domain name:

• Sub-domains are 3rd level domains that you create for any 2nd level domain that you have on your account (i.e. anything.yourdomain.com is considered a sub-domain name). These domains are free because once you own the domain name you don't have to purchase any 3rd level domain that you create for that domain name.
• All domain names (including 2nd level domains and sub-domains) that you add to your account after the main domain name is considered an add-on domain name (unless you first delete the main domain name from your account). There is a $2.99/mo hosting fee for each add-on domain name that you have above the limit for your selected plan.