A Drop Cap in Word 2007 is taking the first letter of the first word in a paragraph and enlarging it. Basically, making it so large that it "drops" a couple of lines, or as many as you'd like. You're probably more familiar with Drop Caps when as a kid you'd read fairy tales, and almost always the first paragraph started with "Once upon a time..." with the letter "O" in the word "Once" enlarged to the point of taking up several additional lines below. To create a Cap simple click anywhere in a paragraph, click on the Insert Tab on the Ribbon, go to Text group and click Drop Cap arrow to either one of the two defaults, or select Drop Cap Options to set your own parameters.

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