That's pretty easy Mike.
Just go to the migration settings and select just the users to be migrated. Disable everything else.
So you are right that the password hashes don't match. Here comes our authentication plugin. You have to enable it. When a user then tries to login with the drupal password, out plugin will try to create the drupal hash and log him into the site. If the user has provided the correct password the plugin would then auto-update the hash to the joomla one. So in the ideal situation, when every user has logged in you no longer need the authentication plugin
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Regards,
Daniel