In the upper right corner of the screen, click on the "gear" icon to open the course settings.
On the resulting drop-down list, click on the Gradebook setup option.
In the gradebook, make sure all of the grade items (quizzes, assignments, etc.) are grouped into a category. You must do this prior to the next step.
In the same row as the category header, look in the Actions column. Click on the Edit drop-down list box and select Edit settings.
In the Grade category section, click on Show more...
In the Drop the lowest field, enter the number of items you would like to drop from the calculated grade. For example, if you would like to drop the lowest 3 grades, type in the number 3.
Click on the Save changes button.
You can now return to your course using the Back button.