Create new dataset using SQL against existing dataset

Is it possible to create a new dataset by writing a SQL query that selects from another dataset? When I try to do this, the only data sources available are the tables in my Snowflake connection. I need to query a dataset that lives in one of my folders.

Hey Gary!
You can certainly reference a dataset via SQL from another dataset.
The path can be found the (i) icon in the dataset, see screenshot below for details.
This capability is also referenced in the documentation here

Added Datasets