Owls, like many other birds, eat their food whole. Since birds do not have teeth, they can't chew their food. Therefore, they use their strong and sharp beaks to rip their prey apart and then swallow large chunks whole. The owl slowly digests its meal by separating the softer materials (such as meat) from the harder material (such as bones). It then regurgitates the harder material along with indigestible items such as feathers and fur in the form of a pellet. This is an owl pellet that's been pulled apart to reveal the bones inside. The fur is the gray stuff surrounding the bones. I found this pellet under a white pine in a forest.