To plot the Power Spectral Density (PSD) of a signal, the discussion highlights the use of the FFT function in MATLAB. A user inquires about alternative methods, specifically seeking a command that outputs the PSD directly without windowing, similar to the "spectrum" command. Another participant mentions the 'dspdata.psd' function available in MATLAB 7.8 R2009a, which is part of the Signal Processing Toolbox, but notes that it still requires using FFT first. The conversation emphasizes the need for a more straightforward command for PSD calculation without additional processing steps.