Learn Spanish (Latin America): No entiendo esto.

Esto is the neuter form of this. You use it when referring to a general idea, a situation, or an unknown object rather than a specific masculine or feminine noun. Since the sentence does not name exactly what this is, we use esto.

Where is the word for I in this sentence?

The word for I is built right into the verb. The ending -o in entiendo tells us that the subject is yo. You can say Yo no entiendo esto, but dropping the yo is much more natural and common in Spanish.

Why is there an ie in entiendo?

The infinitive verb for to understand is entender. It is a stem-changing verb, which means the vowel in the middle changes when you conjugate it. For the I form, the e changes to ie, making it entiendo.