Located in the Filters menu and Colors category. It is also available via the Layer menu if you want to use it as a non destructive effect via the live filter layers. To use it, you need a layer to work on and the layer needs to be filled with something such as white or black.
It is an infinite filter. The filter uses a set of mathematical expressions. The help command is the key source for the expressions / equations. Luckily, the effect comes with a set of starter presets (if you are using it in RGB, you are not so lucky if you are using it in CMYK). The presets are a great start point for fantastic effects. You can save your own presets. The filter works over the red, green, blue, and the Alpha channel. Create lines, spots, waves, and more designs.
Procedural texture requires a layer. You can use the layer as input or not. For the spot filter, use the red, green, and blue channel data. A good start point is a Preset of the filter, smoothed bars. You can edit the equation. Instead of one line, two additional lines can be added. This splits the filter into red, green, and blue. Each line can have R and G and B settings added. Additional factors can be added via the custom input fields, in the form of reals.
Instead of lines, grids can be created. Use rx and ry in combination. The smoothing factor varies the result. Set to 0, sharp lines. Set to 1, blurry diamonds. Generate beautiful colored spot designs based on the underlying image. As any image can be used, millions of colorful designs can be created. The result can also be used as a source. The basic equation is smoothosc(rx*a/w,b)*R*c + smoothosc(ry*a/h,b)*R*d for the red channel. The filter can be modified further. The smooth function has several variants. Try out other functions. Check the help for all the functions, there are 100s of them with all the parameters. Distort the spots using the deform filter. Re-color using adjustments.
You can use the effect to invert the colors of an image as it comes with a range of options such as R (red) G (green) and B (blue) and you can always set the channel information to 1 - R as well as 1 - G etc to invert the image or a particular channel. You can also use the R and G etc in combinations such as R+G and R+B as well as perhaps a gray scale (R+G+B)/3 as well as perhaps a R*1.2 or R-G etc. Literally millions of possible combinations to create a color invert effect for the current layer
The effect comes with a huge amount (well, a few) presets and some are super colorful, some are just very basic gray scale or black and white based presets and you can see that there is only one equations involved and that is for the R G B all together. You can break the equation into separate channels by copying the equation and then clicking the + in the middle left of the panel to add some new equations and then set the first to the R (the letters on the right side of the equation) and the second to G and the third to B and then paste the equation into the green and blue channels. Change some of the equation settings or use the custom inputs in the bottom half of the panel so instead of just using 0.7 times something, create an input of a and b and c for the color channels and replace the 0.7 with a or b or c. You can click the R or Z etc buttons to add real custom inputs etc. You can then vary the color settings for the channels so the result is different. You can tweak the equation even more by adding slightly different functions etc to the red as to the green channel or perhaps add in some additional values as well. You can then create a new preset called 'color4' version of the previous preset via the right side menu at the top of the panel and add it to the same category or a create a new category for all your modified presets.