The extend tool is designed to allow connecting line segments that do not intersect or share vertices. Line extension is a two step process:
With the
Digitizer tool, select the line feature you would like to extend one or
more line features to. Then from the Move/Reshape Feature(s) right-click menu option select EXTEND - Select Feature to Extend Line
To.
Then use the Digitizer tool to select the line feature to be extended. From the digitizer right-click menu select EXTEND - Extend the Selected Line(s) to Extend - To Feature from the Move/Reshape Feature(s) right-click menu option.