Melon Friend is Billy's pet watermelon in the Gmod Melon Friend mod. John Smigglebug adopted Billy this melon, but then when it became all creepy, John decided to kill it. Billy protected the melon by shooting and killing his own father. Billy then became possessed by a melon Friend and killed Officer Daniels, an almost perfect double for his father who was investigating Smigglebug's disappearance.
It was later revealed to to have been a former scientist working for Darth Calculus who was accidentally transformed into a melon along with the rest of the science team by the faulty "melon flavoured" batch of the immortality formula created by Jonathan Toast.
Melon Friend likes to say things like "I dream about cheese" and other weird things. He also likes to hide in dark corners. He explodes when eaten.
Melon Friend(s) is/are very persuasive, quickly gloating Billy into an insane proxy efficient enough to make Billy kill his own father.
John Smigglebug one day adopted a Melon Friend for his son Billy Acachalla. Then Melon Friend started to act creepy, and Billy's father wanted to kill it, but Billy killed John. A police man, Officer Daniels, came to visit and investigate, were he found gunshots and blood and a dead man in a room. Officer Daniels found Melon Friend, but was killed by Billy.
In a prequel video Johnathan Toast, while working for Darth Calculus accidentally turned a bunch of scientists into watermelons, this may be where Melon Friend and the various other living melons seen throughout random videos came from. This was later conformed to be canon by Isaac and Jordan Frye in the PUBG December 2017 Livestream.