The Holy Blood is a cloth that was allegedly used to wipe Christ's wounds. The cloth was brought to Bruges in 1150 by the Count of Flounders and has since been celebrated every year since.
The day's activities include a series of tableaux performed at the Main Market Square (these are essentially re-enactments of important religious events in history). The return of the Count of Flanders is also performed whereby the Holy Blood is paraded through Bruges.
It's clearly a proud day for many in Bruges and is well worth going along if you're interested in religious history or even if you just like watching elaborate re-enactments of historic events.