Extensions are apps in SmartDraw that generate a diagram automatically from a data source.
How Extensions Work
Extensions generate diagrams by translating some external source of data into VisualScript, a diagram mark up language, and then passing that to SmartDraw to be rendered as a diagram.
SmartDraw has a number of built-in extensions that let you point to a source of relevant data and generate a diagram like a class diagram or database diagram automatically.
You can also create your own.
Here's a quick overview of how an Extension works.