On opening a .txt file MusiCAD will create a MusiCAD file with the .txt-file embedded. Nothing revolutionary to that. However, if the lyrics text contains chord symbols between brackets they will be displayed using a special text style for chord symbols in lyrics. This way it is as easy to transpose lyrics&chords files as it is with 'ordinary music'.
Thus a file containing lyrics like:
[C]Dance, [Am]dance, [C]wherever you may [Am]be, [C]I am the Lord of the [Dm] dance said [G7]he. I 'll [C]lead you [F]all, wher[C]ever [G7]you may [C]be, 'cause [Dm]I am the [G7]Lord of the [C]dance [F]said [C]he.