To create custom animations in PowerPoint: 1) Select the "Custom Animation" option from the "Slide Show" menu bar dropdown after opening a PowerPoint file and selecting an object. 2) Choose an animation effect like "Entrance," "Emphasis," "Exit," or "Motion Path" using the "Add Effects" button to make the object enter or exit the slide in a customized way. 3) For "Motion Path" effects, specific animated paths and directions can be set for the object along with speed, direction, timing, and display options.