You use the continuity setting to charge the condenser, then quickly swap the leads and set the meter to check for low DC voltage. You should see a momentary spike, if the condenser is good.
The continuity setting on your meter looks to have a diode and a + on it.
Condensers are cheap replace it if you are unsure if it is good. If it is broke, you will not have spark in a conventional magneto ignition..