Refractor Collimation:

To use this eyepiece, simply cap the telescope, remove the diagonal, and place the eyepiece directly in the focuser. Use natural daylight or shine a flashlight into the side opening with the 45-deg angled silver plate. Look into the small opening at the top of the eyepiece. You will see one or more small faint circles (usually overlapping) near the center. Adjust the objective cell's push-pull bolts until the small circles merge into one. Thats it! With precise collimation, your refractor telescope will deliver the best image it can.

Image left: not well collimated refractor / right: better collimated refractor - not perfect but OK.
The perfect theoretical goal should be concentric rings.

Suggestions:

Check that your focuser is aligned properly with your telescope tube. 

This item can only be used if your refractor telescope cell has a push-pull or other mechanism to adjust the lens elements. It will be of no use with fixed cell objectives that cannot be adjusted. But you can see, how good or bad your objective is collimated

Newtonian Collimation:

At Newtonian telescopes, the reflected images of main- and secondary mirror must be exactly concentric. Due to the centric viewing position, this can be achieved without errors.