Why Won't Multisite allow to create subdomain sites??

I Cannot create a new site on WP Multisite when I try to create a subdirectory OR a subdomain. Either way, it shows that new wp site urls don't exist. See here:

http://www.dreamlifeinternational.com/createstyles.com/subdomain-subfolder-wp-multisite.PNG

My site StyleFlaunt.com is hosted as an ADDON domain on Hostgator. Main site is DreamLifeInternational. It appears that multisite will only let me create a new site on the MAIN domain DreamLife when that is not even my domain, it is the domain of the owners who I am renting a shared hosting account with. Please let me know if it is even POSSIBLE to be able to add a wordpress multisite on a hostgator hosting setup like this.

Thanks!