It's where the files in the Recycle Bin are stored. On NTFS file system, the folder is called Recycler, and on FAT32, called Recycled.
It's a "protected operating system file". Go back to Folder Options, View, and untick the "hide protected os files". Confirm. click OK (you can change it back afterwards.)
Then double click the C:\Recycler folder. Double click the icon(s) (like the recycle bin icon), and delete the files there. The files inside are safe to delete - as long as you intend to delete them.