Three tools are commonly used to collimate Newtonian reflectors: the sight tube, the Cheshire eyepiece, and the laser collimator.
The sight tube has a cap at one end with a tiny peephole in its center. Some models have cross hairs at the other end. You insert it in the focuser and look through it to line up the optics.
The Cheshire eyepiece is the real collimation workhorse. It is essentially a peephole tube with a shiny face set at 45° to the barrel and exposed through a hole in the side. If you use it in the dark, you can illuminate its reflective face by shining your chart-reading light into the opening. Looking through it, you will see this face as a bright circle reflected in the secondary and primary mirrors. Unless the latter is grossly miscollimated, you also see its center spot somewhere inside this circle. A simplified version is a sight tube with a circle of reflecting tape inside the cap. Some popular models (such as the one pictured above) are combination Cheshire eyepieces and peephole sights.
The laser collimator is a solid-state laser module mounted in a housing that fits the telescope's focuser. It emits a narrow beam of light along the focuser axis. It is very easy to see just where the focuser axis is pointed, and it is very handy for Step 2 of my three-step collimation process. (See "How To Collimate Your Newtonian Reflector".) However, its utility is limited for the more critical Step 3.