How would I configure it to redirect a specific subdomain that doesn't exist to a folder within my normal domain?
how you do this depends on your specific configuration.
first you need to get the hostname resolved at the dns. that means either adding name resolution information for that specific subdomain or configuring your dns for wildcard subdomains. the specifics depend on your interface to the zone file editor for your dns provider.
then you need to add virtual host information to your server config for the specific subdomain or for wildcard subdomains. the specifics depend on the type of server you are using and the interface to the server config by your web hosting provider.
then you need to add some rules to redirect requests for that specific subdomain to the subdirectory. and what you may actually want is an internal rewrite to that directory or making the document root directory for that hostname the subdirectory in question. the specifics again depend on the type of server you are using.