This is called a conditional value list.
These links should help:
Forum Tutorial: Custom Value List?
Knowledgebase article: http://help.filemaker.com/app/answers/detail/a_id/5833/kw/conditional%20value%20list
Hierarchical Conditional Value lists: Conditional Value List Question
Feel free to post follow up questions here if those links aren't enough to get your value lists working correctly.
ok great, ill try those right now and let you know how it goes.
Ok, i went off of your demo file and its gotten me closer to understanding how it works but im still confused on how to duplicate it in my DB using my data. I see in the demo you have a layout called values, where all the different values are listed. Is that something i need to do?
More importantly, you need a table where each record stores a value for your value list. The values layout refers to the values table. There's a relationship between the data entry layout's table and the values table that uses the value selected in one field to control what set of values appears in the value list. To fully see how this is set up, you need to check out Manage | database | reltionships and manage | valuelists.
The other links that precede the download link to the demo file describe the relationships, and tables needed in a fair amount of detail.