Chrono_Tata is correct. The text file has to be named the same as the game rom's name.
Example:
"Retro Game Challenge USA 3377.nds" (this is the game rom)
"Retro Game Challenge USA 3377.txt" (this is the game text file)
Also, I can't remember if this is standard or not, but I have all my text files in a seperate directory "/text" that is on the root directory. If you want your text files in a different directory, you'll have to edit the /CycloDS/config.xml file. Specifically the following line.
CODE/TEXTJust change /TEXT to whatever directory you want your CycloDS to look in for text files.