The eventhandler is a program or script, that smsd runs, whenever it receives or sent a message or when it was not able to send a message.
Smsd calls the script before it moves the file from the provider queue into the failed or sent queue.
Smsd gives two or three arguments to the eventhandler. The first one is SENT, RECEIVED, FAILED or REPORT. The second one is the SMS file filename. The third argument is the message id of the SENT message, it is only used if you sent a message successfully with status report enabled.
There is an example script in scipts/smsevent.