The Bunnyfish is a quest item that is needed for the Angler. It is obtained by fishing in a Forest.
Out in the forest, I was fishing right? Well guess what! A bunny hopped up to me! Then another one hopped up, and another... suddenly I'm surrounded by bunnies! One even swam up to me from the water, but it had no legs! I fell outta my chair in surprise and all the bunnies scurried off! I want that bunny fish as a pet, so you better catch it for me! Pronto!