An Addon Domain allows you to use a portion of your webhosting account for a different domain name.
For example, if you have a webhosting account with the domain name animals.com and you want to add 2 other domain names to your account, cats.com and dogs.com. With an addon domain, you give each domain it’s own DocumentRoot. You might set cats.com to have a DocumentRoot of /home/animals/public_html/cats and you might set dogs.com to have a DocumentRoot of /home/animals/public_html/dogs. This means that when someone goes to http://cats.com they will get the directory structure as it is laid out at /home/animals/public_html/cats and when someone goes to http://dogs.com they will get the directory structure as laid out at /home/animals/public_html/dogs.
Addon domains are an extra $1 per month per addon domain.