If you’re using Apache, you’ll need to create a new VirtualHost configuration for the new subdomain.
Before you start, make sure that you point the subdomain to your Droplet (using the DNS manager if you utilise DigitalOcean’s DNS manager, or using your domain name provider’s DNS manager).
DigitalOcean has a tutorial here on setting up VirtualHost configurations, but chances are you may already have one setup if you followed a separate tutorial to install Apache.
This tutorial was made for Debian 8, but you didn’t specify what distribution you’re on specifically. Most distributions will be similar, and the configuration itself will be pretty much identical regardless of distribution. However, the location of the files mentioned in that tutorial may change depending on distribution.
CentOS is here
Ubuntu is here
Simple search on DigitalOcean tutorial site yields these results, just incase I haven’t listed the distribution in this answer :)
From there – yes, make a new database within MySQL and make a new installation directory (ie. a root directory where you want the new subdomain to point to). Make sure you change the root directory in the VirtualHost configuration to match that, so that the web server will know how to propagate the results of the query when you access that subdomain.
Make sure you reload or restart your Apache web server so the configuration changes take place :)
The Apache web server is extremely powerful and flexible, which is why it's the most popular way of serving web content. Apache can host multiple domains or interfaces on one server by splitting sites into separate virtual hosts. In this guide, we will walk you through how to set up Apache virtual hosts on a CentOS 7 VPS.