To make a file the child of another file, click and hold on the file you wish to move.
When you move it up or down the tree, the selected page will become a gray box.
When the box goes on top of files in the tree, they will become bold.
When the file that you want to be the parent is bold, let go of the mouse button.
The file name will reappear branched off of the parent file.
In order for the change to take effect on the website, the Generate Menus button in the Control Panel will need to be clicked.