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Is it possible to Delete the free account? If so, How?

When you choose a service you have a few new options for domains. The one I'm thinking of is the last one which is a domain you already own but it is registered with another registrar. I'm assuming I will go back to that registrar and enter my DNS info and wait for it to populate.

When you set up a new service they do have a paid domain transfer "coming soon". Very convenient.

When you do this free option to use pre owned domain, what is happening on the back end? How does it get pointed? Do the DNS records change? Do I just point it to a URL or Directory?

Anyone know when and how much the transfer Domain from another registrar will be for free plan?