The Source Code is the unknown and unknowable creative force that flows through the Net and gives it life, the power that the highest of cosmic beings such as the Living Moderator answer to. It rarely interferes directly with any reality. It is said that even a glimpse of this Code can grant immense power, and countless would-be-conquerors have faced ignominy after failing to reach the Source Code.
The Pega.SYS is a cosmic McGuffin that is some kind of emanation of the Source Code. In The Bellerophon Gambit, Acton Lord used it to travel to the Real World (later revealed to be Real World Minus One) to stitch up an universe-threatening continuity problem caused by the retconning of his origin. Acton Lord then made a dash for the Source Code, but fell off the Pega.SYS, which was assumed back into the Code to protect it from further harm.
But the ever-ambitious Acton Lord was not deterred, and <stuff about Acton Lord etc goes here>
Nature of the Source Code
According to the account of one traveler who entered the Code , the Source Code is the power of creation or creativity itself, manifesting through the Writers, especially the parts of themselves they don't fully understand.
This power manifests into the Looniverse embodied through the inspiration of particular creators as tangible cosmic forces, including but not limited to the Power Kirby, the TheyMightBePowers, and the Power Gruenwald wielded by Freon, as well as the corrupted manifestations of the Power Liefeld and the Power Byrne. This allowed the influence of those creators to extend to aeons before they existed, which made it possible, for example, for the undead president James K. Polk to use the TheyMightBePowers.