-dit(bf(--password-file)) This option allows you to provide a password
-in a file for accessing a remote rsync daemon. Note that this option
-is only useful when accessing an rsync daemon using the built in
-transport, not when using a remote shell as the transport. The file
-must not be world readable. It should contain just the password as a
-single line.
+dit(bf(--password-file)) This option allows you to provide a password in a
+file for accessing an rsync daemon. The file must not be world readable.
+It should contain just the password as a single line.
+
+When accessing an rsync daemon using a remote shell as the transport, this
+option only comes into effect after the remote shell finishes its
+authentication (i.e. if you have also specified a password in the daemon's
+config file).