This is essential for the maintenance of the drilling tool while drilling - and a good tool to have in any shop after you're done. This device puts a small drip of air tool oil into the air hose while using any air tool, and keeps them lubricated for maximum performance. This is necessary for the hard work the drill will be doing to keep it running well.
It also removes humidity from the compressed air line to keep moisture from causing damage to air tools - a real problem in humid climates.
It also functions as a regulator, to reduce the amount of air - useful for some applications.