Crafting recipes can use both regular items and custom items as ingredients or results.
Custom recipe definitions go into plugins/Origami/custom/MY-CONTENT-PACK-NAME/recipes. If this directory is empty, then Origami will generate an example file for you.
Below is an example of a crafting recipe where surrounding a "Rainbow Block" (see the Custom Blocks page for details) with 8 diamonds results in a custom item, in this case enchanced_rainbow_block, being created.
Notably both an ingredient and the result here are Blocks - Blocks can be used just like any other item and the player will receive the item form of said Block.