Can't understand domain mapping setup

The installation instructions are a little bit unclear to me...

Some info:
My setup is using subfolders, the network is using a VPS with a dedicated IP, and the plugin has been installed correctly.

Here is where I get lost:
First, do I have to park a domain in my cPanel, and then point that A record to the IP of my install? I have a spare domain for testing that I have registered at mydomain.com, do I have to edit any DNS info or A record in there? Or should I add a parked domain in cPanel?