You can create mail accounts for all your domains on the mail server. DNN has nothing to do with this process. However in DNN , if you need to authenticate with the mail server to send out email, there's only a single mail account to use and that's the one defined in the root account. You  have to do this for all your portals, whether they are child or parent type.

This is a big limitation in DNN and I have posted several times about this issue indicating each portal needs to have its own smtp settings. There are hosts out there which use DNN as a hosting platform and using a single mail account to authenticate with the mail server for all the domains being hosted is just not acceptable. The Host/ISP will not be able to monitor, log, filter or block messages on a per account basis because all messages from all the domains or accounts are coming through the same mail account. If a user is sending out spam, the ISP will not know who it is because the same mail account is shared with every user from every portal/domain.

I had some users here arguing against this and it seems they understand very little about mail server security.

Thanks Tony.  This makes perect sense.

I think this is where my confusion is.  To host DNN child portals require you create an alias for each.  On 3 separate hosts I have created domain aliases each with separate DNS records (this is with Plesk CP).  When I go to setup mail accounts there is no record of the alias, only the root domain has a record for the mail server.   So either the host has put restrictions on Plesk, or Plesk cannot do what is needed even though each alias has the required DNS info.
As an FYI, I posted this question to the forums becuase I have submitted requests to the hosting companies with the same explanation and have been redirected to generic knowledge base entries which contain no relevant info.

One of the issues with child domains is they are a subdomain of the registered domain.  So your domain might be foo.bar and your subdomain/child portal may be foo.foo.bar.  That means that, for may setups, the mail domain is foo.bar for both.  Ask your host if you are allowed two mail domains in this setup.

Jeff