Fillets can be created at the 3d level using the fillet feature and the 2d level using the sketch fillet command. Sketch fillets do reduce the number of features in the tree and provide the same basic control as any constant radius fillet.
To apply any fillet you can select a vertex or any two lines that intersect. This can be considered general knowledge if you come from an auto cad background. The extra function that was dropped into the command is that the lines do not have to intersect. Here I selected the the angled and horizontal lines and the sketch fillet command will apply the radius and close the loop at the same time.