apply calls a function with a set of arguments. It's not part of jQuery, it's part of core Javascript. However, there is mention of it in the jQuery docs:
The above calls the function somefunction, setting this to thisObj within the function's scope, and passing in the arguments from argsArray as the arguments to the function.
Essentially, apply will call a function with the context being set to the object you apply the function to. This means that within the function, referencing this will refer to that object.