It uses the mailqueue system if you have it enabled in your vbulletin options -> email options.
Keep in mind, it can create significant stalls in emails being sent out if you enable that too well. If you set it for 5 messages at a time, and 100 people are subscribed to a forum then it can take a LONG time to get all of those messages out if your forum doesn't have alot of foot traffic.
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