It's at the "fruitless plant" back of the screen, to the left of the cactus. If you drop a villager on it they'll study it for a while then think "It looks like it could produce fruit ..." and wander away. It's a puzzle to get the fruit to ripen (see the guides), but afterwards it's supposed to promote long life, although no-one has shown whether it does or not. If you drop a villager on it once it's ripened they "enjoy magic fruit", but no obvious change happens.