A draft collar is a tube of fabric, usually filled with goose or duck down, located just below the hood of a sleeping bag or the head end of a backpacking quilt. It’s designed to wrap around the top of your chest and around your shoulders tops like a collar to prevent warm air from escaping when you move around at night. Called the “bellows effect”, the hot air inside your sleeping bag which has been heated by your body heat, is forced out of the top of your sleeping bag when you move around at night. A draft collar prevents this by sealing the top of the bag around you and is a very desirable feature usually found on premium sleeping bags designed for cooler weather camping and backpacking.
Here are some links to gear reviews about the sleeping bags and quilts that have draft collars. Check them out to see more photos of what draft collars look like: