The Knapsack is a magical knapsack that was given to Kendra mysteriously while she was held captive by Torina. It has an extra-dimensional storage compartment so that once you are inside, the knapsack can be flattened, jostled, or dropped and you will not feel anything. The art of making such things was lost long ago.
In Secret of the Dragon Sanctuary, Warren and Bubda were trapped inside the knapsack when Navarog burnt the knapsack, diconnecting the connection from the inside and our world. In Keys to the Demon Prison, it was revealed that Grandma Larsen had given it to her.