The C&R FFL is for the "Collecting of Curio and Relic" firearms. The ATF has determined that any firearm, in original condition, that is at least 50 years old is a "Curio and Relic." In addition, certain specific firearms less then 50 years old have also been determined to be "Curio and Relics" due to their scarcity or collector interest or some combination of factors. A couple of examples of the second category include the East German Makarov (but not Bulgarian) and the Czech CZ-82.
To apply for a C&R FFL you download and fill out the application from the ATF website. You also need to fill out the "proof of citizenship" form that is not actually on the application. You need to send a letter and a copy of your application to your local "Chief Law Enforcement Officer", just to inform him that you have applied for a C&R. You do NOT need his approval and he doesn't need to take any action. You send the original application, along with a $30 (I think?) fee to the ATF at the address listed on the form. When you receive your license, it is valid for 3 years before you have to renew it.
When you have a C&R license you are REQUIRED to maintain a "Bound Book" that lists any C&R firearms you have acquired since you receive your C&R license, even if you did not actually use your license to acquire that firearm. This is called "logging in" that firearm.
You are also required to record the "disposition" of any C&R firearm you dispose of during the time of your license. This is info relating to who you sold it to, the date of the transaction, and ID info on the purchaser. This called "logging out" that firearm. You are required to log out any C&R firearm in your bound book that you disposed of during the time of your license even if you acquired the firearm before you had your C&R license.
When you have a C&R license you are allowed to receive C&R firearms directly to your address. You are the license holder for that purpose. Many, but not all, of the big distributers will sell C&R firearms directly to C&R license holders. This saves you money as you get them at a better price and saves on FFL transfer fees. You'll need to send a signed copy of your C&R license to the seller before they'll send the firearm out though.
Be aware that certain states, such as California and NJ, place additional restrictions on C&R holders. For example, in California I believe all handgun sales must go through a FFL dealer and C&R holders can not have C&R handguns shipped right to them due to this state law.
One last thought: A C&R license is designed to help you improve your personal collection. It is NOT a business license and you will get in trouble with the ATF if they determine that you are in the "business" of buying and selling firearms with a C&R license.
For more info, go to the ATF website. Probably
www.atf.gov.