He's using a sequencer for the intro, samples and songs for the rest of it. What he's achieving with the XY pads and virtual knobs is a series of effects, filters, attack, resonance, transposition, etc.
All of this is achieved the same way by Ableton, which makes me suspicious of those connected audio jacks. The Korg apps most likely control Ableton via MIDI.
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Schuyler
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