Mendeley offers a free version of the citation reference manager and a social collaboration tool. Mendeley has an integrated PDF viewer for annotation, highlighting and adding notes directly on your PDFs. Create citation records by importing or drop and dragging a PDF file. The free account includes 2GB of online storage.
Zotero is a free open source citation manager that will keep track of your sources and format your bibliographies. Create citations from imported PDFs. Very intuitive interface and 300MB free online storage.