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In this AutoCAD tutorial, the instructor demonstrates how to add text to a sketch. To insert single text, use the "text" command, click the desired insertion point, set the height and angle (usually zero), then type the text. For multiple lines of text, the "mtext" command is employed; click the starting point and then select the desired area for the text box. Text height can be adjusted by double-clicking the text and inputting a new height value. Lastly, the tutorial covers the "mleader" command for adding text with leader lines, providing a clear method for annotating drawings effectively.