Folders allow you to organise your references into logical groups.
Folders may contain sub folders and can be added and deleted as required.
This 1 minute video will show you how to create folders.
References can be added to a folder by clicking and dragging them from another folder.
References in a folder can be removed by right clicking on the reference and selecting Remove from Folder.

Note! The reference will still be in the All Documents folder.
You can remove a whole folder by right clicking on it and selecting Remove Folder.

Note! The references will still be in the All Documents folder.