The keychain is a small pink toy of an owl that Beth (Action Lab) had attached to her keys.
Many years after the killings at Bodega Bay Inn, many people started to take dolls there as offerings to the house and Beth placed this keychain alongside the other dolls. After Corey had sent the puppets on a rampage and murdered all of Beth's friends, she convinced the puppets to turn on him instead.
After the puppets had killed Corey she had asked Decapitron to place his soul into her keychain. After this she had kept it in a shoe box in her closet at home and had tortured it everyday by ripping out the stuffing from inside of it and setting it on fire. She did this as revenge for all of the people that Corey had killed.