Unfortunately, there is a bug in the current Events module (version 3.3.8), that makes it impossible to use it the way you want: if you enable the category select box (in the module settings) to be displayed in the module, AND set the list view as default or only view, the module will show an error message instead of an event list! I don't know when this bug will be fixed, as there currently doesn't seem to exist a module project team. There was a bugfix posted by a user ("Events Module 03.03.08 Beta"), but exactly this thread cannot be opened at the moment due to a bug in the Forum module! (sigh)
But even if there wasn't this bug in the Events module, it wouldn't help, because I noticed that my above description of master and subcalendars was misleading (sorry for that!). Actually master and subcalendars are independent instances with their own events, but a master calendar also displays all events of those subcalendars that are assigned to it. The way you need it - distributing certain events from the master to various subs - is not possible. Trying to visualize the directions that the events go, it's not Sub < Master > Sub (read the angle brackets as arrows), but Sub > Master < Sub
Also, the categories of the events to be displayed can only be selected by the users, but not preselected by the portal admin.
I don't know which Events module version there was in DNN 3.1.1, but if it was 3.2.0, you can still downlad that version from the downlad page and replace your current module version.