This is a fairly straight forward option to enable, but is a very powerful feature once enabled.
Content types provide organizations with a way to consistently manage and organize content across different lists and libraries in a Web application, and they also make it possible for a single list or library to contain different types of items or documents. Before list managers can add different content types to a particular list or library, you must turn on support for multiple content types on that particular list or library
Turn on support for multiple content types in a list or library
Add an existing content type to a list or library