DVD pointers?

[Dorothy Hennings]

I have a 1.5 hr imovie4 on my external HD. When I use iMovie on my boot 
internal drive on my iMac everything runs ok.
When I try to make a DVD from iMovie4, and the encoding is proceeding, 
I note that my external HD is really working. Does this mean the DVD is 
getting the data from the  external HD and not from the iMovie in the 
viewer?
Is the iMovie one has in the viewer just a bunch of pointers rather 
than a transfer of copied data from the external HD?

George