Essentially the mortising attachment is a tool to drill square holes. It is a square tubing sharpened like a chisel on the end with a drill bit in the center. As the drill bit drills out the hole the square chisel cuts out the corners making a square hole and then you can move it over and make more having a rectangular hole.
Now as for as operation it is for a mortise and tenon joint. Instead of putting two pieces of wood together with dowels you cut a tenon on the end of one piece and mortise the other.