The function of the text filter is very simple: it converts line breaks (e.g. from form input) to <br />. As WACT normally escapes all HTML output, you must use the text filter in conjunction with the raw filter.
{$mytext|text|raw}
Using ‘raw’ here would allow any ‘malicious’ HTML to pass through from $mytext, so you should probably pass it through the html filter first:
{$mytext|html|text|raw}