Create a Sub-Folder
To create a new sub-folder go in to the "parent" folder and click on Add Folder, enter the title and save.
Moving existing folders
To move a folder into another folder (thus create a sub-folder) there are two ways to do this.
Dragging one folder into another folder.
Click on the context menu (3 dots on the right hand side) of the folder that you wish to move. Click on Move to Folder and select the folder where you want it moved to.
Note: When you are within a folder and wish to return to the Documents home page click on the Home button on the top left.