The Image Caption plugin for Obsidian enables users to add captions to both internal and external image embeds in their notes. Captions can be easily added by using a pipe symbol (|) after the image source for internal embeds or via alt text for external links. It supports image resizing with flexible dimensions, and captions can be customized using delimiters or styled with CSS. The plugin also allows for automatic caption numbering and the option to render captions as HTML. This tool is particularly useful for enhancing the visual presentation of images in project documentation, content management, or other note-taking scenarios.