According to MSDN:
Data is stored in a database and processed, compared, sorted and indexed on the server, as in UTC. The time zone offset will be stored in the database for retrieval.
In your example, the data will be stored in binary format, which can be converted to 14 Nov 2013 23:00 -5:00, which means a date and time that are local, as well as a time offset from -5 hours to UTC (suppose this is for Canada).
When you store this type of value, you must consider the offset yourself; the system does not do this automatically.
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datetimeoffset MSDN.
create table dto (dto datetimeoffset(7))
insert into dto values (GETDATE())
insert into dto values (SYSDATETIMEOFFSET())
insert into dto values ('20131114 08:54:00 +10:00')
,
2013-11-14 07:56:17.2300000 +00:00 -- current time, no offset so useless in this case
2013-11-14 07:56:17.2338125 +11:00 -- current time with my local offset (in Australia)
2013-11-14 08:54:00.0000000 +10:00 -- manually inserted data