The Monster Candy is a consumable item found early in Ruined Home, specifically in the candy room right after the Dummy training tutorial. Asgore left a note below the candy bowl telling people to only take one. However, the protagonist is able to take up to three of them.
Later on, after completing the Puzzle Gauntlet, the protagonist is rewarded a special item called Monster Candy...? It comes with tape attached to it, which somehow make it heal one more HP than a regular Monster Candy.