In DNS parlance, a CNAME record is an alias from one hostname to another. For example, your web server might have an A record of
webserver.example.net, where your hostname is "webserver" and your domain is "example.net". In order to have
www.example.net point to this server, you might use a CNAME, or alias.
A BIND format CNAME record looks like this:
www IN CNAME webserver.example.net.
This creates an alias from
Adding CNAME records to your DreamHost-hosted DNS domain
This can be useful if you run servers outside of DreamHost and you would like to direct additional names to those machines.
It should be noted that for hostnames, you should use an A record, not a CNAME. A CNAME, or alias, is appropriate for additional names that refer to that same host, as in the example above.
You can't set a SOA and a CNAME on a domain, which effectively means you can't set a CNAME on a domain itself. This is a DNS restriction.