I agree with geezer, it sounds like the igniter is bad. they go by different names like igniter/icm/coil pickup etc. its job is basically like you mentioned it being a replacement for points in an older distributor. its a self contained module that contains a pickup coil and some circuitry to switch on and off ground to the coil to generate spark. one wire powers the circuitry inside and the other is coil ground if i remember correctly. there may be a way to test it but ill have to check my service manual for my 87' that uses a very similar module. i had one die on me and it acted like a dead coil. if you replace it you may need to set the gap between it and the rotor for it to work properly.