This is the directory (or directories) where Smarty will look for the plugins that it needs. Default is "plugins" under the SMARTY_DIR. If you supply a relative path, Smarty will first look under the SMARTY_DIR, then relative to the cwd (current working directory), then relative to the PHP include_path. If $plugins_dir is an array of directories, Smarty will search for your plugin in each plugin directory in the order they are given.
Technical Note: For best performance, do not setup your plugins_dir to have to use the PHP include path. Use an absolute pathname, or a path relative to SMARTY_DIR or the cwd.