You need to use the FDISK utility.
Be careful when doing this, however, because you will lose any data on the entire disk.
To be technically correct to what hermanm explained, you have to partition the drive BEFORE formatting, since the FORMAT utility needs a drive letter to format, and the drive letters are assigned by partition. But since they're usually done one immediately followed by the other, prior to OS installation, it can be said that they're done at the same time.
The FDISK utility is pretty straightforward. It's a menu-driven utility, and you just tell it what partition structure you want, and it sets it up for you. You then reboot, format each partition, and install the OS to the partition of your choosing, although Win9x is picky about being installed on anything but the first primary partition.
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