I was wondering how one would be able to get their URL to be forums.***.com instead of www.******.com/******/forums

Keep in mind the 2 domain names are different. Along with the forums are located 2 folders deep inside the second domain.

How would I do this? I know with invision free it was quite simple. I am sure I just missed something.

You could set up a soft redirect in the htaccess file...

Or check the settings in the panel your host provided.

check the "subdomain" section (under cpanel or whatever web admin software you are using).

I was basing it on: forums.***.com/***.*** would redirect to www.***.com/****/forums/***.***

Where can I find this file?

Well I did setup a subdomain. The only little problem is when I click on links the the threads the URL doesn't change. Thats what I want to fix.

So when people open up threads it would say forums.***.com/thread...... and not just forums.***.com

Ohh yes and let me add few more things

1. Host is on dreamhost.com
2. Domain name is on godaddy, which I think only has CNAME

I would say the only way to do that is make another hosting account with the address forums.******.com and transfer the directory. (Only if you are a reseller)

you could try to change your url in the admincp settings so it uses the "new" url by default