Tugboat is a command line tool for interacting with DigitalOcean droplets, allowing users to easily manage their droplets without leaving the command line. It was created by Jack Pearkes from Berlin and can be used to perform various tasks such as retrieving lists of droplets, SSHing into droplets, creating new droplets, and destroying existing ones. With Tugboat installed and configured, users can streamline their workflow and automate repetitive tasks, making it easier to manage their DigitalOcean resources.