Your guess is correct. If you click on the link to the dde23's Algorithm section, you will find that it states "dde23 tracks discontinuities and integrates with the explicit Runge-Kutta (2,3) pair and interpolant of ode23. It uses iteration to take steps longer than the lags."
If you wish to delve deeper into this topic, I would encourage you to refer to the following academic papers:
- L. F. Shampine and S. Thompson, “Solving DDEs in MATLAB,” Applied Numerical Mathematics, vol. 37, no. 4, pp. 441–458, Jun. 2001, doi: 10.1016/s0168-9274(00)00055-6.
- P. Bogacki and L. F. Shampine, “A 3(2) pair of Runge - Kutta formulas,” Applied Mathematics Letters, vol. 2, no. 4, pp. 321–325, 1989, doi: 10.1016/0893-9659(89)90079-7.
