Yes, that thing you have circled.
Something to note is that a tighter head will become more bouncy and easier to get multiple taps per hit - including accidental hits. So on bass drums, a lot of drummers prefer this to be not too tight, but it will be a preference thing.
We also don't want it too lose, or we'll start pounding the actual electronics of the pad - we don't want to do that.
It is highly recommended that folks work the tension of these 'lugs' evenly, in small increments at a time. Uneven tension can result in bad things, like a warped hoop or pulling the head out of the bead (the metal ring around the head that connects to the rim).
In these small increments, we like to recommend doing so across the rim on opposing lugs as shown in this image. The number representing the order in which the lugs are tightened/loosened. Note that one doesn't need to start on the same lug as represented as "1" on the image, so long as we follow this cross-lug pattern.