judging by your question, i'm guessing you're not intimately familiar with events. An event can be many things, including a button being pressed with the mouse, a key on the keyboard being pressed, a process being completed, etc. In the case of the code you posted, I'm guessing there's only one sender, which is "button1" being clicked. So "object sender" refers to the button you just clicked.
I'm weak on events, but imagine you have a form that asks you what types of vegetables you eat, then at the bottom there are two buttons: one that says you eat less than 3 servings a day and one that says you eat more than 3 servings a day. Let's say this form estimates how much vitamin A you get a week.
Instead of writing very similar code (calculating how much vitamin A there is in each vegetable), for both button1 and button2, when they get clicked, you can have both button1 and button2 refer to the same code and do your business with the math, then test if it's button1 or button2 to find your multiplier, i.e.
if (sender.name == button1)
myResult = myResult * 3
myResult *= 4
Dunno if that helps. The short answer is the "object sender" refers to whatever raised the event, and sometimes it's helpful to know what raised the event as many objects can raise the same event.
Hope that helps.