I don't know if this is the right way to do it or not, but it works for me.
What I do is rename the text file to the same as the rom file name.
Example:
Rom file: Advance Wars - Days of Ruin - USA - 1964.nds
Text file: Advance Wars - Days of Ruin - USA - 1964.txt
You can use a program such as CycloEdit Professional (search it here on the site or on google) to change where the CycloDS looks for text files. I use a seperate text folder on the root directory.
Hope this helps some.