I assume that the domain name you use is already published on the dns system to be hosted on your hosting server.
Here is a very simplified description of the process (my intuitive understanding though, not an authorized one):
You, through the hosting control panel, or more likely your hosting support, should mark the desired folder as the virtual folder for the dnn application and assign the domain name
www.mydomain.com as its domain.
This will cause any request for the domain
www.mydomain.com on the dns servers to direct the request to the hosting server (which is already done if my first assumption is correct) and the hosting server will direct it to the that virtual folder.
Now the DNN system takes control and looks in the portal alias to find the
www.mydomain.com string in the table.
If it does not find any you get an error.
If it finds it will invoke the system to show the requested page.
Now, you see that the virtual directory, after configured correctly, can be anywhere in the hosting server file system (with the hosting environment restriction and policy of course). So, you can put the files anywhere including a subfolder /dnn/ and still assign a portal alias as
www.mydomain.com only. It will still be able to go to the virtual directory and pick the site from there without adding the extra /dnn/ to the web address.
If you add a second address to the portal alias table, (not a unique address like
www.my2nddomain.com but something like
www.mydomain.com/dnn/ ) the hosting server does not really care about the difference since all it has to know is that every address that starts with
www.mydomain.com has to be submitted to the virtual folder you specified before and DNN will take care of it.
In your current situation you have to set the first portal alias to
www.mydomain.com but DNN does not let you do so for the first item in the portal alias table with the user interface.
Instead you can use the Host – SQL page and insert the sql statement :
UPDATE PortalAlias
SET HTTPAlias = N'www.mydomain.com'
WHERE (PortalID = 0)
Assuming you are working on portal 0 and where
www.mydomain.com is your domain name.
HTH
Yehuda