It makes red blood cells

 Yes it is present in the bone and is known as bone marrow. It is responsible for the creation and storage of approximately 95% percent of the body's blood cells. The 3 main types of blood cells produced by bone marrow are:

1. Red blood cells (RBC): Which take oxygen to all body parts.
2. White blood cells (WBC): Help fight infections and antibodies.
3. Platelets: Help with blood clotting.

 The marrow in bones make red and white blood cells and in times of need can convert yellow marrow to red marrow so as to replace lost blood. Here is a link to more information on marrow and its purpose. en.wikipedia.org/wiki/Bone_marrow