MODx can live anywhere. It sounds like you have a subfolder on your server where this MODx installation lives, something like "/home/yourusername/public_html/cms/". That path the only thing MODx cares about.
If you want the sub-domain to point to that folder you have to set that up in your web hosts Apache configuration. There is nothing you need to do in the MODx manager.
The only thing you might need to change is the the line in your .htaccess file.
Change:
to
since it is no longer pointing to a sub folder of another domain, but to a new separate sub domain.
-sD-
Dr. Scotty Delicious, Scientist.