The document library in SharePoint is the main repository for storing documents. One can store documents of any kind. It can be a text file, a word file or a jpeg Image.
In order to upload a file, one has to go to the Document library and click on the upload button. Then using the browse button search for a file from the computer which you want to upload. A point to be noted is that you cannot upload files which are in the One Drive folder of your computer. The reason being is that Office 365 has One Drive already synced and inbuilt. So in order to access the One Drive files in SharePoint one has to goto one drive in Office 365.