The displacement engine was an improvised weapon created by "Jack" the Ancient and John Crichton to destroy an approaching Scarran Dreadnought. John and Jack modified a phase stabilizer designed for wormhole travel by Furlow.
The weapon when attached to a replica of Farscape-1 and piloted by Crichton with his wormhole knowledge unlocked was able to destroy a very powerful warship. It warped an open wormhole so that it touched a star. This pulled matter from the star and launched a giant fireball at the Dreadnought vaporizing it.
Unfortunately, the power source was radioactive and while foiling an attempt by Furlow to steal the engine John was exposed to a massive dose radiation. Shortly after Crichton destroyed the Dreadnought he died from radiation poisoning, leaving his twin the only John left.
The weapon was also designed to burn out after one use so that the technology wouldn't fall into the wrong hands.