This is a collimation cap for visually collimating Newtonian reflectors with 1.25" focusser tube. You only need to put this cap on the focussing tube and look through the tiny pinhole. If the centre of the primary mirror is visible dead centre, you should she your own eye in it which means that collimation is correct. Please consult a proper guide before starting.
Google sketchUp pro 2016
Overview and Background
Lesson Plan and Activity
Look through the hole in the cap after fixing it in the focusing tube.
NEVER POINT THE TELESCOPE TOWARDS THE SUN.