The Rune Bomb is a unique quest item given to the player by Lester the Farmer. He needs to bring his cows back to the orchard across the bridge, but the only way to do that is to destroy the entrance to the Festering Nest so he can get across.
It can be assumed that the Rune Bomb is a powerful arcane item. It was given to the farmer by Adria the Witch after he asked her for help.
If the optional Jersey's Jersey quest has been enabled, Lester will be gone and the Complete Nut will be the one to give the Rune Bomb to the player.