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The Kindle device can handle PDFs effectively in two ways: through USB cable side loading or using the "Send to Kindle" feature. When side loading PDFs, you won't be able to draw on them. The settings available for side loaded PDFs include fonts, top bar, layout, margins, contrast, and highlighting. However, you can't use the palette on the side or draw on the PDFs. Using the "Send to Kindle" option allows for similar functionality but does not limit drawing capabilities. Highlights and notes can be made, but drawing with a pen will be treated the same as using a finger.