  This paper reviews the topic of sub-parsec - scale jets in quasars, and
covers the the following issues: observations of parsec and sub-parsec scale
jets; energy dissipation and particle acceleration; radiative processes;
magnetic fields, pair content, and energetics; and variability and its relation
to the central engine activity. In particular, we describe how internal shocks
can explain properties of gamma-ray flares and demonstrate that MeV blazars
(those with luminosity peak in the 1-30 MeV range) can be unified with GeV
blazars (those with luminosity peak at GeV energies) assuming that in GeV
blazars the gamma-ray flares are produced via Comptonization of broad emission
lines, whereas in the MeV blazars they result from Comptonization of infrared
radiation of hot dust. We also make predictions about the radiative effects of
bulk Compton process in the soft X-ray band and show how spectral and
variability properties in that band can be used to constrain structure of jets
near their bases.
