hooks? eh? :)

You might wanna learn more about Drupal before doing this. Essentially, you need to write a custom module. You'd "hook" to other Drupal functions, in this case hook_domainrecords(). To do that, you name your own function (which is inside your module) example_domainrecords(), but instead of example use the name of your module (which is something you pick yourself).

That's why agentrickard's code starts like this:
// This assumes you have a module named custom.module.
function custom_domainrecords(&$grants, $node) {
global $_domain;
...

Anyway, start by reading on how to write your own module.