open (my $fh_out, '>', $out_file) or die "unable to open '$out_file' for writing: $!";

my $t = XML::Twig->new(
    twig_roots               => {'display-name' => sub { convert( @_, $fh_out) } },
    twig_print_outside_roots => $fh_out, # as mentioned in a previous response
    pretty_print => 'nice'
    );

# including data for ease of post    
$t->parsefile( $file);    

sub convert {
    my ($t, $elt, $fh) = @_;
    ...                      # do what you have to do to $elt
    $elt->print( $fh);       # this is where you have to print it
}