What are citation managers?
"Managers" are programs that allow you to organize your references and sources. They are very similar to how iTunes organizes your music. An example is Mendeley.
Most citation managers also include "plugins." A plugin adds buttons to your word processing software (such as Microsoft Word or OpenOffice). These buttons allow you to automatically insert in-text citations and bibliographies into your paper. An example is Zotero.
Warning for Students
Sometimes these programs incorrectly format references, for which your professor may deduct points. It is your responsibilty to use style guides to double-check the accuracy of automatically-generated citations.