Found on the Rippling Walls.
"A fashion accessory, covered in soot.
Holds great value...of the sentimental variety. Also holds hair firmly in place. Best hang onto it just in case."
To Rucks: "Is she here already? Where is everyone?"
- "I try to let The Kid down gently. This is the Bastion alright. 'Cept no one else showed up."
To Zulf: "You didn't happen to see a girl who wore this in her hair, did you?"
- " 'We all lost loved ones in the Calamity', he says. 'I don't know how I'm gonna go on without mine.' "
Belonged to a girl named Nacie that The Kid had a crush on.
She never appears in flashbacks, or arrives at the Bastion, but a petrified ash statue does appear in a cutscene after the Rippling Walls, presumably this is Nacie.