These small and vividly red mushrooms grow in tight clusters. They multiply on rotting logs and branches under the the dense canopy of the woods.
The local Dunmer harvest it for the magical properties it has and uses its round cap in a variety of alchemical processes. As the name already indicates picking them without the proper precautions will cause severe blisters on the the exposed skin.
Blisterspore - Othreleth Woods, Morrowind