Each quest can consist of many individual steps, which are grouped to larger milestones or tasks. These tasks can be grouped again and again unless only one node remains. The resulting structure is the Quest Tree, whose leaves are the individual steps and whose root is the complete quest. The nodes in between represent milestones of the quest.
If you have read about documenting the plot you will possibly notice a certain resemblance between Dependency Graphs and the Quest Tree. Former will show the connection between all milestones of the same level, while latter will show the relation between first level milestones and their second (and higher) level descendants. You could say that the dependency graph is a horizontal view of the plot, while the quest tree is a vertical view.
What is not represented by the quest tree is the order in which steps must be completed to complete the quest. Usually, not all steps will be required as there will be multiple alternative ways to complete each quest. For the tree above, either milestone 1 or milestone 2 could be sufficient to complete the quest, but it could also require both of them.
To allow the engine to calculate the proper state of completion, a completion rule has to be specified in the Quest Editor, which determines a nodes state of completion from the state of its direct children.