A folder contained within another folder (sometimes called the parent folder). When discussing command-line activities, this may be called a subdirectory.
A folder inside another folder. If the folder "Pictures" is inside the folder "My Files", "Pictures" is a subfolder of "My Files". On some systems, referred to as a subdirectory.
Electronic storage directory created within another directory. Subfolders create a hierarchy of directories that help organize data to keep like information together and separate from other, unrelated data.