If you want to annotate digitally, you have a few options. You open the file; then, if you are using Acrobat, you can click on comments and markups to highlight and insert comments wherever you want.
If you don't have Acrobat, you open the file, then open MS Word. Adjust the windows so they are open side by side. As you read, you can take notes in Word. You could label your notes "Paragraph 1," "Paragraph 2," etc. Then you can cut and paste important lines into Word and write notes about the text.