settings.php question

I am trying to setup a separate drupal subdirectory that is its own drupal install that lies within a pre-existing subdomain.

Let me explain. Currently I have the following working drupal domains setup within the "sites" directory

/sites
dlsdrupal.org sub.dlsdrupal.org

These are all run from the same core drupal install with seperate mysql databases.

***Note****
This is just a development install where I am just testing. Any DNS entries are within my Linux etc/hosts file.

I want to make a subdirectory within sub.dlsdrupal.org that is its own drupal install, also with a separate database.

http://sub.dlsdrupal.org/subdir

According to the settings.php file, I can do this:

* For example, for a fictitious site installed at
 * http://www.drupal.org/mysite/test/, the 'settings.php'
 * is searched in the following directories:
 *
 *  1. sites/www.drupal.org.mysite.test
 *  2. sites/drupal.org.mysite.test
 *  3. sites/org.mysite.test

So, I make a directory within the sites file:
sub.dlsdrupal.org.subdir

I do the normal install method steps:
1. cp the default.settings.php file over to this directory
2. rename it to settings.php
3. Change the permissions on this file and directory so drupal can write to it
4. Create the database

However, when I go to the URL:
http://sub.dlsdrupal.org/subdir

I receive the Drupal message:
Page not found
The requested page could not be found.

I still seem to be within Drupal at this point.

Here is my /etc/hosts file:

# Do not remove the following line, or various programs
# that require network functionality will fail.
127.0.0.1               FireCracker localhost.localdomain localhost
::1             localhost6.localdomain6 localhost6


10.3.0.99       dlsdrupal.org
10.3.0.99       sub.dlsdrupal.org

Am I missing a step in this process?

Any input would be appreciated.