The given equation of the ellipse is \( x^2 + y^2 + 10x + 8y - 23 = 0 \). Let's first rewrite it in standard form by completing the square.
\[
x^2 + 10x + y^2 + 8y = 23
\]
Complete the square for both \( x \) and \( y \):
\[
(x+5)^2 - 25 + (y+4)^2 - 16 = 23
\]
\[
(x+5)^2 + (y+4)^2 = 64
\]
This represents a circle with center \( (-5, -4) \) and radius 8. Now, the tangents drawn from the external point \( (1, 1) \) to this ellipse will form two tangents.
Since the tangents from a point outside an ellipse are always real and distinct, we will find the point \( P(m_1, m_2) \) where \( m_1 \) and \( m_2 \) are the slopes of these tangents.
The tangents to the ellipse form a curve, and the point \( P(m_1, m_2) \) lies inside the ellipse, as the tangents from the external point meet the curve inside the ellipse.
Thus, the correct answer is \( \boxed{\text{lies inside the ellipse}} \).