It's supposed to reset to "_dstwo/dstwo.nds" as far as I can tell. The actual loader code appears to be compiled into the "reset_patch.bin" file. That file is then loaded into the ARM7 memory and the program execution is reset to it. That reset_patch.bin then, I presume, reboots to "_dstwo/dstwo.nds". As follows:
memcpy( (char *)0x23fc000,reset_patch_bin,reset_patch_bin_size );
runreset=(void(*)(void))0x23fc000;
runreset();
Obviously, since it's precompiled, it's hard to know if the problem is with their code or my own. I'm using most of the sample file exactly as it was distributed, the only changes are changes I had to make to allow it to compile (I changed PowerON and PowerOFF to PowerOn and PowerOff, I removed the SOUND_CR=0 line, and changed the ARM9 Makefile slightly). I can't imagine any of those changes preventing it from working, but I might be wrong. Which is why I was wondering if anyone else had got it working.
-Edit-
Forgot, I also had to edit out the "clr_cache(&resetAndLoop,0x1000);" line. I'm not sure what the purpose of that is, but it was preventing me from compiling.