The friendly bum talks about having an item for you.: It opens up a new dialogue option with him "You said you had something for me?" or something along those lines. Not exact. Anyway, choosing it provides the following text:
He nods. "Oh yeah, it's a doozy. But before I give it to you, you've got to know the history."
"So, I knew this guy who used to run with some vigilantes… well, the Vigilante and some of his friends. Anyway, he used this to clean up the streets around these parts."
The bum stops for a moment, his smile faltering for the first time you've seen. "The Fangs… took him out of the picture. But he'd want you to have this."
He stoops over a ragged pile of garbage, sorting through it with his good hand. After a minute, he pulls out an old, splintered, wooden baseball bat. "Here you go. The Fangs… took her out too, but she might be able to help. Hope so, she's all that's left."
He swallows hard and stares into the night sky. "Yeah… everybody else is dead or crazy. It's a damn shame. You'll need all the help you can get, chief."
You found: cracked baseball bat