  We can probe observationally and reproduce theoretically intricate properties
of the Crab Nebula nearest to the pulsar - The Inner Knot. The tiny knot is
indeed a bright spot on the surface of a quasi-stationary magnetic relativistic
shock that accelerates particles. It is required that the part of the wind that
produces the Inner Knot has low magnetization; thus, it is not a site of
gamma-ray flares.
  We develop a model of particle acceleration during explosive reconnection
events in relativistic highly magnetized plasma and apply the model to explain
the Crab gamma-ray flares. Particles are efficiently accelerated by
charge-starved DC-type electric fields during initial stages of magnetic flux
merges. By implication, the magnetic reconnection is an important, and possibly
dominant process of particle acceleration in high energy astrophysical sources.

High Energy Astrophysical Phenomena