You'd add the "dev" record to whichever nameservers are handling example.com. The same place you'd go to point
www.example.com to a different IP address, basically. Might be with the original registrar, or it might be with the current hosting company, or it might be with someone entirely different.
Or!, if you have another domain within your control (i.e. your main/"corporate" domain) and don't want to muck around with the existing domain at all, you can also add a record to your domain. This is handy when customers are involved, since you can fling something up without involving them at all.
Say your domain is sodtech.net, and you're working on a new site to replace example.com. You could add "example.sodtech.net" to sodtech.net's DNS, and set it up in your web server as an alias for the new example.com site.
Both approaches work just fine, and would allow the site to be visible to anyone who knows the temporary location.
(Which reminds me: you might want to set up basic authentication to "hide" the site a bit while it's under development. I use an approach not unlike the "READ ME: username is foo, password is bar" used on forum.linode.com; just enough to keep the bots out.)
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