Check the link below. See if it helps you understand better. Below is the excerpts from the link.
Frame Relay subinterfaces provide a mechanism for supporting partially meshed Frame Relay networks. Most protocols assume transitivity on a logical network; that is, if station A can talk to station B, and station B can talk to station C, then station A should be able to talk to station C directly. Transitivity is true on LANs, but not on Frame Relay networks unless A is directly connected to C.
Additionally, certain protocols, such as AppleTalk and transparent bridging, cannot be supported on partially meshed networks because they require "split horizon" in which a packet received on an interface cannot be transmitted out the same interface even if the packet is received and transmitted on different virtual circuits.
Configuring Frame Relay subinterfaces ensures that a single physical interface is treated as multiple virtual interfaces. This capability allows us to overcome split horizon rules. Packets received on one virtual interface can now be forwarded out another virtual interface, even if they are configured on the same physical interface.
Subinterfaces address the limitations of Frame Relay networks by providing a way to subdivide a partially meshed Frame Relay network into a number of smaller, fully meshed (or point-to-point) subnetworks. Each subnetwork is assigned its own network number and appears to the protocols as if it is reachable through a separate interface. (Note that point-to-point subinterfaces can be unnumbered for use with IP, reducing the addressing burden that might otherwise result).
www.cisco.com/en/US/tech/tk713/tk237/tec...186a008014f8a7.shtml
