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Previously, when you tapped on a day that had a dot below the date, indicating that it contained events, there would be a dramatic change from the month view to the daily hour-by-hour view. It looked like this:
Tap on, say, 4 (March) and the display radically changes to hour-by-hour view.
iOS 7.1 introduces a second way to show those events. You access it by tapping the Show Events icon at the top of the calendar display, to the left of the search icon. It's circled in red below.
Now, when you tap on a day that contains events, the monthly calendar contracts slightly and creates room underneath for a list of events. That preserves the monthly view and allows you to step through days, holding the monthly calendar fixed while seeing the daily events dynamically change.
Now, monthly calendar is frozen. Events appear below the calendar. You can tap
each day in succession. In this case, March 4 & 5.
Note also that the vertical bar (see red arrows above) in front of the event is color keyed to the specific calendar. In my case, shown here, the blue bar is for home & family events while the green bar is assigned to TMO work.
You can toggle back and forth between these modes by tapping the Show Events icon at the top of the month view. This new option is very much how the calendar worked in iOS 6 and before, and it's return will likely be greeted warmly.
Finally, note that this new feature is for the iPhone only. The iPad has enough screen real estate to handle individual events differently.