Why does my subdomain not work properly?

So here's the deal. I have a site, www.xylotthemes.com, that works great with its .htaccess file. Things work just as they should. Then, I created a forum, under www.xylotthemes.com/phpbb3-forum, which didn't work so well unless I added the following line to the beginning of the .htaccess:

Options +FollowSymLinks
RewriteEngine on
RewriteBase /
RewriteRule ^/?$ phpbb3-forum/index.php

It basically redirected /phpbb3-forum to /phpbb3-forum/index.php, which I thought it should've done anyway, but it didn't work until I added that.

(I should point out that I'm on a shared hosting account, where each top-level domain points to a folder within my web space, which is just fine for my purposes.)

Now, I added a subdomain to my account (forum.xylotthemes.com) that points directly to the /phpbb3-forum directory. But no matter what I do to the .htaccess file, it just redirects to my main shared folder (www.betterdzn.com, which points to "/" on my hosting account). Could the xylotthemes.com .htaccess file be interfering with the proper function of the forum.xylotthemes.com (xylotthemes.com/phpbb3-forum) .htaccess file?