A CNAME, or Cononical Name, record tells DNS that this hostname is an alias of another domain name. This hostname then ends up resolving to the same IP address as the target domain name.
For each CNAME record you can choose an alias and a host. There are some restrictions....
A CNAME must have no other records of other types (MX, A, etc). This is very important especially with the @ record. If you specify a CNAME record type for the @ hostname, then email will not route properly for this domain name.
CNAME records that point to other CNAME records should be avoided. It is possible to create infinite loops and other error conditions.
Other DNS record types that point to other names, such as NS, MX, PTR and SRV should never point to a CNAME.