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This video tutorial explains the optical character recognition (OCR) tool in CVX. The OCR tool is effective for recognizing letters, numbers, and characters like periods and hyphens. It can be accessed from the function list or the identification category under the characters tool. The tutorial demonstrates how to add the OCR tool to the program, emphasizing the need to define a region around the characters for accurate extraction. The tool automatically separates the characters into individual blocks, though it may not recognize certain letters, such as "F," which will be addressed later. Additionally, users can select font color (white or black) and text direction (right, left, up, down, or mirrored).