it concatenates the two variables together.
$var1 = "hello";
$var2 = "there";
$var3 = $var1 . $var2; //yeilds hellothere
you can also do it with strings
$var4 = "hello" . " there";
or with mixed functions
$var5 = base64_encode($var4) . "\r\n";
i think you can find a small bit on this on the echo page.