What it is is a special ceramic coated welding rod made for bolt extraction. Basically when all else fails and you dont want to drill and tap the bolt you can use the rod, a washer and a nut.
the ceramic coating of the rod protects the threads from being damaged. here is a vid one of my class mates took of me using one.
BTW, I was the only one in my class to get the bolt out on the first try
everyone else either had the nut break loose or buggerd the threads due to actually welding onto the block