diff --git a/docs/shared/reference/nx-json.md b/docs/shared/reference/nx-json.md
index 5c0e9989d6..833d0646a6 100644
--- a/docs/shared/reference/nx-json.md
+++ b/docs/shared/reference/nx-json.md
@@ -6,6 +6,7 @@ The following is an expanded version showing all options. Your `nx.json` will li
 
 ```json {% fileName="nx.json" %}
 {
+  "extends": "nx/presets/npm.json",
   "npmScope": "happyorg",
   "affected": {
     "defaultBase": "main"
@@ -48,6 +49,10 @@ The following is an expanded version showing all options. Your `nx.json` will li
 }
 ```
 
+### Extends
+
+Some presets use the `extends` property to hide some default options in a separate json file. The json file specified in the `extends` property is located in your `node_modules` folder. The Nx preset files are specified in [the `nx` package](https://github.com/nrwl/nx/tree/master/packages/nx/presets).
+
 ### NPM Scope
 
 Tells Nx what prefix to use when generating library imports.