You receive it from the Apple Kid in Twoson if you sponsor his invention and feed him a meal. The first time you arrive in Twoson you’ll come across the Apple Kid and Orange Kid at their houses just below the Polestar Preschool. If you choose to sponsor the Orange Kid, you’ll get a useless item called a Suporma Super Orange Machine. Or if you sponsor the Apple Kid and you’ll get the Receiver Phone when you leave. When you eventually reach the Pencil Statue in Peaceful Rest Valley, it won’t let you pass. At this point return to Twoson and the Apple Kid will give you a call on your newly acquired phone to tell you he’s just finished his new invention. Head over to his house and the Orange Kid will tell you he’s over at Burglin Park. Go there and speak with him, then beat him in battle and he’ll give you his newest invention – the Pencil Eraser! Take this to the Pencil Statue blocking your path in Peaceful Rest Valley to clear your path through and gain entry to Happy Happy Village where you can finally free Paula from her captors. It’s important to hold onto this item for a little while too – since you’ll also need it for other Pencil Statues in Winters and inside Monkey Cave.