Documents by Readdle is a useful file manager, image viewer, cloud synchronizer, pdf reader and download manager. PDF-Reading has however only limited annotation support (notes in text and highlighting), while the ≈10€ Readdle PDF Expert should extend these abilities.
However, I am slightly reluctant to purchase PDF Expert just yet, because I couldn't find out if the App integrates well with Documents; Since iOS usually doesn't give apps direct access to each other I fear, that syncing annotations made in PDF Expert back to Dropbox would require synching my pdfs to both apps — aside from the obvious waste of space, this also brings the risk of file version conflicts.
Documents can send a PDF to Adobe Reader for annotating (quite powerful too), but it is then saved as a copy local to Adobe Reader with no way to move it back to Readdle directly. Worse yet, after doing so I have to versions of the same file; Such file duplications are one of the most annoying issues I have found with managing data on mobile devices; iOS just makes it especially common due to the (otherwise justified) high level of app-isolation.
I fear that the same would apply to PDF Expert though PDF Expert should at least be able to use DropBox.
Best Answer
The Documents app works very well together with the iPhone and iPad versions of PDF Expert (by the same company). You do need to go through the share dialog and you could use another tool such as PDF Pen Pro if you prefer or wanted a universal app for editing PDF that you locate and move using Documents app.
Since iOS abstracts away the filesystem, unless you are careful to push changes back to a cloud storage location, you can get files duplicated, wrong versions and revisions. I don't think there is a silver bullet solution at this point for iOS file management other than using a single app that syncs directly to a shared folder.
Luckily, PDF Expert does just that and works with a plethora of server backed storage options - Dropbox, WebDAV, Google Drive, FTP / SFTP, Office 365 / SkyDrive, Box, Oxygen and Huddle currently:
Even better, you can set up sync to minimize the chance that you will forget to upload or download a changed document.