My understanding of that operation is that the single magnet is acting as your cam sync. It's telling the ECU when #1 is coming. I don't have literature on that specific distributor, but that magnet is likely 10-30 degrees before the #1 terminal. You would feed that information to your ECU, along with the firing order.
Knowing when #1 is coming and when then allows the ECU to fire spark at specific intervals for each cylinder independently.
Hopefully Scott will chime in on this as I believe he'll have a better explanation.
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-Jason
1969 Pontiac Firebird
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