The telescope is primarily featured in Majora's Mask, it is located in the Astral Observatory and allow you to look around all of Termina.
In the beginning of the game it allows you to see Majora on top of the Clock and that triggers an event, other than that the Telescope is virtually useless unless you happen to eye a Heart or even a Heart Piece.
Also there is a Deku Quest which you can unlock which will be very helpful in collecting several Heart Pieces.
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