This explanation goes back to the MBT theory, and I don't know how familiar you are with it.
Since this is a virtual reality, consciousness does not reside in the brain. The brain is only a constraint in how we can process the PMR data stream. The PMR ruleset is also a constraint in how we process the PMR data stream. If you have brain damage you cannot interpret the PMR data stream the same way as if you didn't.
So any chemicals that effect the brain effect how we process data. And some chemicals seem to break down the natural barriers we have that keeps us experiencing just the PMR and the dream data streams. DMT is one of those chemicals. And for some people it seems to give them great insight. I speculate that the LCS may take that opportunity to give someone the information they need to move on in their lives. And that is why the experience is so transformative for them. What someone does with that information is much more important the the drug. Because taking psychedelic drug does not help long-term consciousness evolution.
Also how DMT works in the context of MBT as DMT is a naturally occurring drug released by the brain at the point of death. How could it transfer the mind?
I could find no scientific discussion that has found that DMT is released by the brain at death. Do you have a reference for this?