1.) Some brands of tampons package their tampons individually in 'twist-off' plastic packaging. The 'twist off' perforation is usually in between of the string end and the 'head' of the tampon.

A rocket tampon is one of these tampons with the plastic packaging removed off the string while the 'head' end is still wrapped in packaging. When soaked in water, the head remains in its original dehydrated form due to the plastic but the bottom expands out in a conical pattern, similar to the fins on the rocket. These tampons adopt the appearance of a rocket and is therefore dubbed a rocket tampon.

2.) An insult which is somewhat humorous.
Person 1: Damn it! I dropped my tampon in the toilet while unwrapping it!

Person 2: Did it turn into a rocket tampon?
by BlackAlbinoe September 16, 2013
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