You need a certain item.
Here is an example:
You have two 10mm pistols in your inventory.
Hover your mouse over one of the 10mm pistols and press R. (Or select it on the console and press the button that is displayed on the right as x) Repair)
Then select the 10mm pistol below the other one on the list and click it (or select it).
The other 10mm pistol disappears and the other 10mm pistol has a higher condition now.
Congrats, you repaired something.