A subfolder on a computer is a folder inside of another folder. For example, someone may create a main folder for their music and then create subfolders to separate the genres of music.
Creating subfolders is simple and it allows for greater organization on your computer. Open the folder you want to put a subfolder in and then right-click. In the menu that comes up, click "New Folder" to open the new folder and then give it a name. Make sure that the subfolder is inside the proper main folder and then click "OK" to finish creating the new subfolder.