It's the button with an image of a pen drawing a curve line. You can draw anywhere on the image. You can adjust the curve after you draw by clicking and dragging the blue dots (handles) at the end of the line, or the green dot in the center of the curve. Click the button with three lines of different thicknesses and styles. You can also select different line styles, such as dotted lines, arrows, and textured lines.

Summary:
Click . Draw a line or a shape. Adjust the curve. Change the line thickness.