To Change an XRef Object into a Local Scene Object

In the XRefs Dialog (File > References > XRef Objects)

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  XRef Dialog Entities list

  Highlight the XRef object in the Entities list (the lower list), and then click (Merge In Scene). The XRef object becomes a full-fledged object in the scene, giving you access to its modifier stack.
  Tip: This button is also available in the upper Records list, where it merges all entities from the highlighted source record into the main (current) scene.