How to get an item that's in my inventory to instantiate into the players hand when i click on the item in my inventory.

using UnityEngine;
using System.Collections;
using System.Collections.Generic;

public class Inventory : MonoBehaviour {

public int slotsX = 5;
public int slotsY = 5;
public GUISkin skin;
public List<Item> inventory = new List<Item>();
public bool showInventory = false;
public bool showCrafting = false;
public static List<Recipe> recipes = new List<Recipe> ();
public Transform Hand;

private Item swappedItem;
private bool draggingItem = false;
private Item draggedItem;
private int prevIndex;
private int spikeCount;
private Rect invRect = new Rect(200, 140, 350, 420);
private Rect imageRect = new Rect(0, 0, 50, 50);
private Rect craftRect = new Rect(0, 40, 350, 350);
private Vector2 scrollPosition = Vector2.zero;

// Use this for initialization
void Start () 
{
	Screen.showCursor = false;

	invRect = new Rect(Screen.width / 2 - (invRect.width / 2), 0, invRect.width, invRect.height);
	craftRect = new Rect(Screen.width / 2 - craftRect.width - invRect.width / 2, 0, craftRect.width, craftRect.height);
	
	for(int i = 0; i < (slotsX * slotsY); i++)
	{
		inventory.Add(new Item());
	}

	new RecipeCreator();
}

// Update is called once per frame
void Update () {
	if(Input.GetKeyDown(KeyCode.I))
	{
		showInventory = !showInventory;
		showCrafting = !showCrafting;
		Screen.showCursor = !Screen.showCursor;
		
		if(draggingItem)
		{
			inventory[prevIndex] = draggedItem;
			draggingItem = false;
			draggedItem = null;
		}
	}
	
	//Cheat Keys
	if(Input.GetKeyDown("1"))
	{
		AddItem("Wood");
	}
	
	if(Input.GetKeyDown("2"))
	{
		AddItem("WoodPlanks");
	}

	if(Input.GetKeyDown("3"))
	{
		AddItem("Stone");
	}
}
void OnGUI()
{
	GUI.skin = skin;
	
	if(showInventory)
	{
		GetCraftable();
		invRect = GUI.Window(0, invRect, DrawInventory,  "");
		
		if(Event.current.type == EventType.mouseUp && draggingItem)
		{
			if(invRect.Contains(Event.current.mousePosition))
			{
				inventory[prevIndex] = draggedItem;
				draggingItem = false;
				draggedItem = null;
			} else {
				RemoveItem(prevIndex);
				draggingItem = false;
				draggedItem = null;
			}
		}
		
		if(draggingItem)
		{
			CreateDraggedItem();
		}

		if(showCrafting)
		{
			craftRect = GUI.Window(5, craftRect, DrawCraftView, "");
		}
	}
}

void AddSpikes (float winX)
{
	spikeCount = (int)Mathf.Floor (winX - 152) / 22;
	GUILayout.BeginHorizontal ();
	GUILayout.Label ("", "SpikeLeft");//-------------------------------- custom
	for (int i = 0; i < spikeCount; i++) {
		GUILayout.Label ("", "SpikeMid");//-------------------------------- custom
	}
	GUILayout.Label ("", "SpikeRight");//-------------------------------- custom
	GUILayout.EndHorizontal ();
}


void DrawInventory(int windowId)
{
	AddSpikes(windowId);
	
	GUILayout.Label ("Inventory");
	
	Event e = Event.current;
	
	int i = 0;
	
	for(int x = 0; x < slotsX; x++)
	{
		GUILayout.BeginHorizontal();
		for(int y = 0; y < slotsY; y++)
		{
			GUILayout.BeginVertical();
			GUILayout.Box (inventory*.itemIcon);*

_ if(inventory*.multiItems)_
_
{_
_ if(inventory.itemCounter > 1)
{
GUI.Box(GUILayoutUtility.GetLastRect(), inventory.itemCounter.ToString(), “ItemCounter”);
}
}*_

_ if(inventory*.itemName != null)
{
if(IsMouseOver())
{
if(e.button == 0 && e.type == EventType.mouseDown && !draggingItem)
{
draggingItem = true;
prevIndex = i;
draggedItem = inventory;
inventory = new Item();
if(Input.GetKeyDown(KeyCode.H))
{
Instantiate(Item, transform.position, transform.rotation);
}
}*_

* if(e.type == EventType.mouseUp && draggingItem)*
* {*
_ inventory[prevIndex] = inventory*;
inventory = draggedItem;
draggingItem = false;
draggedItem = null;
}
}
}
else {
if(IsMouseOver())
{
if(e.type == EventType.mouseUp && draggingItem)
{
inventory = draggedItem;
draggingItem = false;
draggedItem = null;
}
}
}
GUILayout.EndVertical();
i++;
}
GUILayout.EndHorizontal();
}
GUI.DragWindow (new Rect(0, 0, 10000, 75));
}
void DrawCraftView(int windowID)
{
AddSpikes(craftRect.width);
Event e = Event.current;
GUILayout.Space(8);
GUILayout.Label(“Crafting”);
GUILayout.Label(“”, “Divider”);
scrollPosition = GUILayout.BeginScrollView(scrollPosition);
for(int i = 0; i < GetCraftable().Count; i++)
{
if(GUILayout.Button(GetCraftable()))
{
Craft(GetCraftable());
}
}
GUILayout.EndScrollView();
GUILayout.Label(“”, “Divider”);
GUILayout.Space(8);
GUI.DragWindow(new Rect(0, 0, 10000, 75));
}*_

* bool IsMouseOver()*
* {*
* return GUILayoutUtility.GetLastRect ().Contains (Event.current.mousePosition);*
* }*

* void CreateDraggedItem()*
* {*
* Rect tempRect = new Rect (Event.current.mousePosition.x + 5, Event.current.mousePosition.y, 64, 64);*
* imageRect = GUI.Window (2, tempRect, DrawDraggedItem, “”, “DragImage”);*
* }*

* void DrawDraggedItem(int windowID)*
* {*
* GUILayout.Box (draggedItem.itemIcon, “DragImage”);*
* }*

* public void AddItem(int id)*
* {*
* if(Database.isItemMultiple(id))*
* {*
* if(InventoryContains(id))*
* {*
* AddItemToExisting(id);*
* return;*
* }*
* }*

* for(int i = 0 ; i < inventory.Count; i++)*
* {*
_ if(inventory*.itemName == null)
{
for(int j = 0; j < Database.items.Count; j++)
{
if(Database.items[j].itemID == id)
{
Database.CopyItem(inventory, Database.items[j]);
}
}
break;
}
}
}*_

* public void AddItem(string name)*
* {*
* if(Database.isItemMultiple(name))*
* {*
* if(InventoryContains(name))*
* {*
* AddItemToExisting(name);*
* return;*
* }*
* }*

* for(int i = 0 ; i < inventory.Count; i++)*
* {*
_ if(inventory*.itemName == null)
{
for(int j = 0; j < Database.items.Count; j++)
{
if(Database.items[j].itemName == name)
{
Database.CopyItem(inventory, Database.items[j]);
}
}
break;
}
}
}*_

* public void AddItem(Item item)*
* {*
* if(Database.isItemMultiple(item.itemID))*
* {*
* if(InventoryContains(item.itemID))*
* {*
* AddItemToExisting(item.itemID);*
* return;*
* }*
* }*

* for(int i = 0 ; i < inventory.Count; i++)*
* {*
_ if(inventory*.itemName == null)
{
inventory = item;
break;
}
}
}*_

* void RemoveItem(string name, int amount)*
* {*
* int removed = 0;*

* for(int i = 0; i < inventory.Count; i++)*
* {*
_ if(inventory*.itemName == name)
{
if(inventory.multiItems)
{
if(inventory.itemCounter > (amount - removed))
{
inventory.itemCounter -= (amount - removed);
break;
}
else if(inventory.itemCounter == (amount - removed)){
inventory = new Item();
break;
} else {
removed += inventory.itemCounter;
inventory = new Item();
if(removed >= amount)
{
break;
}
}
} else {
if(removed < amount)
{
removed ++;
inventory = new Item();
} else {
break;
}
}
}
}
}*_

* void RemoveItem(int index)*
* {*
* inventory[index] = new Item ();*
* }*

* bool InventoryContains(int id)*
* {*
* for(int i = 0; i < inventory.Count; i++)*
* {*
_ if(inventory*.itemID == id)
{
return true;
}
}
return false;
}*_

* bool InventoryContains(string name)*
* {*
* for (int i = 0; i < inventory.Count; i++)*
* {*
_ if (inventory .itemName == name)
* {
return true;
}
}
return false;
}*_

* bool InventoryContains(string name, int amount)*
* {*
* for (int i = 0; i < inventory.Count; i++)*
* {*
_ if(inventory .itemName == name)
* {
if (inventory .multiItems)
{
if (inventory .itemCounter >= amount)
{
return true;
}
} else {
return false;
}
}
}
return false;
}*_

* void AddItemToExisting(int id)*
* {*
* for(int i = 0; i < inventory.Count; i++)*
* {*
_ if(inventory*.itemID == id)
{
inventory.itemCounter ++;
}
}
}*_

* void AddItemToExisting(string name)*
* {*
* for(int i = 0; i < inventory.Count; i++)*
* {*
_ if(inventory*.itemName == name)
{
inventory.itemCounter ++;
}
}
}
public List GetCraftable()
{
List craftable = new List();
for(int i = 0; i < recipes.Count; i++)
{
foreach(var mat in recipes.items.Keys)
{
if(InventoryContains(mat, recipes.items[mat]))
{
craftable.Add(recipes.itemName);
}
}
}
return craftable;
}
public void Craft(string item)
{
List craftable = GetCraftable();
for(int i = 0; i < recipes.Count; i++)
{
if(recipes.itemName == item)
{
foreach(var mat in recipes.items.Keys)
{
RemoveItem(mat, recipes.items[mat]);
}
}
}
AddItem(item);
}*_

}
this is my inventory script.
i already set up the empty gameobject its supposed to instantiate to on line 14

I guess the variable that stores the transform of the player hand is:

public Transform Hand;

Considering this your Instantiate like should be:

if(Input.GetKeyDown(KeyCode.H))
{
    Instantiate(Item, Hand.position, Hand.rotation);
}

Your code was just instantiating that item at the position of the gameobject to which this inventory script is attached and using the rotation of that same gameobject.

You need to set the parent of the instantiated object to the hand position.

Something like this:

Item.transform.parent = hand.Transform;