What can I do with the teddy in Granny chapter 3?

Take the teddy to the room of Slenderina on the top floor. Place it in the cot/crib and Slenderina will appear and drop an item for you.

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To take the key from the crow in granny 3 get the log and place in the fireplace then find the matches and go to the fire place to light the wood then go to the roof and collect the item, every time you die you have to relight the fireplace.