Erythema multiforme was first described by von Hebra in 1860. As part of the EM/Stevens Johnson/TEN spectrum, it is an immune-mediated process by which the immune system attacks the skin at the dermoepidermal junction, either locally (EM) or generalized (TEN) or in between (S-J). The typical EM lesion is a lesser version than that seen above, but has the same raised border, raised central region and same target-like appearance. EM is often seen on the palms and soles and is also, as part of SJS, seen in the mouth.
The reason for this pic is not to give you the "gimme" targetoid pic on Caucasian skin, but show you a more advanced lesion that is on pigmented skin. The great thing about this particular pic is that the central area is so bullous, it is leaking, which should be a clue as to where the split is (at the DEJ).
Those of you who guessed fixed drug eruption were not far off. The split for FDE is also junctional, but is VERY unusual in the mouth, and is also rarely multiple and rarely on the palms. So, given all you know, the best guess would be EM.