If you pass according to PADI standards he'll send in your documents and you'll be a divemaster. If you pass according to what he thinks you should be able to you'll have the offer of working in his shop as a divemaster, with pay and all.
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My Instructor required that I polish a few demo skills more, and the owner said that since my DM course took longer than the norm that I audit ("Intern", whatever) a couple of OW courses. Though I really didn't think I needed either, it's obviously the Instructor/shop's perogative to require more than the basic standards (I was told I was good enough to get the cert., they just wanted a bit more to hire me). So, I wonder what other requirements your Instructor had? A shop can require anything they want since they're going to pay you, but the "hands out" thing just seems silly.