What does the External Editor option in the preference menu do?

The external editor is for users that want to use DigiCal (widgets) with another calendar application.

If you enable it, the next time you try to add a new event you will be asked which calendar app you would like to perform this action with. You can then choose among a list of calendars and then decide whether this is a one time only thing or whether you always want to use this particular app. (You can go to phone settings > apps > "target calendar app" > clear defaults, to reset this).

Once this is set up the next time you press the + button, the edit screen of your chosen app will be opened. Unfortunately it's not possible at the moment to have it directly go to the event information screen of your chosen app, so when you tap on an existing event in the widget it will open up DigiCal's event info screen. When you then tap on the edit button now you'll go to the editor of your chosen app.