Previously the Jester spawned randomly in the Graveyard. During the Dispatch event, two Summoning Stones were added to GY, using the stone causes the Jester to appear for a moment. The north stone is used for the Lalalas in My Head quest, and the south stone is used for the Jester's Lost Marbles quest.
Jester tells you, "Oho! Rythy doesn't know what he's playing with. But I know. I KNOW! AHahahahahaha!"
The Jester is located in the Jester's Prison and is only accessible after completing the quest once, then talking to the Jailer at least 48 hours later.
The Jester throws a wide range of items, including tables, health bolts, arcane pyramids, chairs, and even a lifesize cow.