Methyltransferase that adds a 2'-O-methyl group at the 3'-end of PIWI-interacting RNAs (piRNAs) and small interfering RNAs (siRNAs) which are classes of regulatory RNAs that are involved in gene silencing in endogenous RNA interference (RNAi) pathways (PubMed:22536158, PubMed:22548001, PubMed:22829772). Methylation protects the 3'-end of small RNAs from tailing and trimming and could constitute a recognition signal for appropriate argonaute machineries (Probable). Methylates and stabilizes 26G-siRNAs (a class of 26 nucleotide siRNAs that possess a monophosphorylated guanine residue at the 5'-end) when they are bound by argonaute protein ergo-1 (PubMed:22536158, PubMed:22548001, PubMed:22829772). This occurs in the female germline and embryo, but not in the male germline (PubMed:22548001). Does not methylate 26G-siRNAs bound by argonaute proteins alg-3 or alg-4 (PubMed:22548001, PubMed:22829772). Methylates and stabilizes 21U-piRNAs, which are a class of 21 nucleotide piRNAs that possess a uracil residue at the 5'-end, in the male and female germline (PubMed:22536158, PubMed:22548001, PubMed:22829772). In addition, may play a role in exogenous RNAi (exoRNAi) pathways in the germline (PubMed:22829772). S-adenosyl-L-methionine + small RNA 3'-end nucleotide = H(+) + S-adenosyl-L-homocysteine + small RNA 3'-end 2'-O-methylnucleotide Binds 1 Mg(2+) ion per subunit. Nucleoplasm localization ceases following fertilization (PubMed:22548001). In embryos, diffusely localized in the cytoplasm (PubMed:22829772). In cells of the P-lineage (germ cell progenitor cells) in embryos, localizes to granules and at later postembryonic stages of development, localizes to perinuclear granules in the germ cells (PubMed:22829772). Broadly expressed in the germline and somatic tissues in both hermaphrodites and males. Expressed in the germline and soma throughout development (at the protein level) (PubMed:22548001, PubMed:22829772). Highly expressed in embryos (PubMed:22548001, PubMed:22829772). Expression is lowest during the early larval stages and increases as the germline proliferates, peaking at the adult stage (PubMed:22548001). RNAi-mediated knockdown suppresses RNAi-mediated silencing by siR-1, which are 22G-siRNAs (a class of secondary 22 nucleotide siRNAs that possess a triphosphorylated guanine residue at the 5'-end and are formed from 21U-piRNAs and 26G-siRNAs). Belongs to the methyltransferase superfamily. HEN1 family.