  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.
