In the Pokemon_Evolution script, you will see that it comes with five Custom methods of evolution. When defining what an evolution method does, you are able to pass one variable from the pokemon.pbs file to Pokemon_Evolution, typically the level (as that is what the variable is named in all of the code), but it can also be things like an Item, a map ID (for Location), etc.
Now, I'm not sure what you mean by "Item" evolution, but I am going to take it literally and say that you want to combine the Item evolution method (which requires you to use the item on the pokemon, rather than have it hold it).
Could you elaborate on which method you mean? Using an item, or having a pokemon hold an item and then evolve when it levels up?