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On opening .txt files 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.
Will produce.

In fact, a txt-file is embedded in a section, on an invisible/empty staff.
Use the text menu to embed a lyrics/text-file within a MusiCAD-file.
