The idea behind this is very simple, instead of using your host DNS domain name servers names, you are using the same servers but under your domain name. This is how it's done
Login to your domain registrar control panel (Go Daddy for example) by clicking on "My Account"
After you login and from the "Domain Names" drop down menu, click on manage domains
Locate the domain for which you would like to create nameservers
Click on your domain name
Click on "Domain host summery"
Click on "click here to see details or to modify"
Enter ns1 in the Host field as your first name server and name server IP as provided to you in your welcome e-mail
Click on "add new host" and do the same for ns2 then "save changes"
Allow from 24 -72 hours for the changes to take effect
Now you can point your domain to your custom created name server from your control panel.