Lots of modern OpenType fonts include typographic ligatures which combine specific letter combinations into a single glyph (e.g. "ae" or "oe").
Ligatures are used to make text easier to read and for stylistic effect.
Ligatures are contained within the font file and can be enabled by clicking the "Ligatures" button in the text tool info bar.
Ligatures are split into multiple categories which define how and when the ligatures are created. You can select which categories you want to apply to a specific area of text.
Select a string of characters with the text tool and then click the "Ligatures" button in the extended info bar to open the ligature options.