[Ron Wood]

While I was composing my answer, Alvin explained the disconnector. My explanation is worded a little differently, so perhaps between the two you can visualize the function of the disconnector. Here is what I wrote:
DYNOMIKE.
The disconnector is what permits the Luger to function as a semi-auto pistol. When you squeeze the trigger it presses down on the lower arm of the transfer lever (what Avin referrs to as the L-bar) which is located inside the side plate (which unfortunately you do not have). Pushing down on the lower arm causes the upper arm to rotate in, which in turn presses on the disconnector causing the sear bar to move and release the striker (firing pin). As the action returns to battery to fire the next shot, with the trigger still depressed the upper arm of the transfer lever is still in its innermost position. The disconnector contacts the transfer lever and, being spring loaded, retracts into the sear bar. Only when you release the trigger and allow the transfer bar to rotate back out can the disconnector "pop out" and be in the firing position again.