$mybb->settings['dateformat'] NOT working properly.

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There are several ways to do that, either using mktime (you need to explode the returndate first to get month, day and year), strtotime (since it is already in day-month-year and using dash (-) as a separator, you can use it directly) or by using DateTime::createFromFormat / date_create_from_format (need at least PHP 5.3, you can also use it directly).