This is unlocked in the first wave of the Challenging Stage directly after level 10. A couple rows of Dragonflies will come down, you don't need to kill any you just need to have one appear on your screen.
Tips to make the game easier:
Before the game starts you can go into
Settings then
Game Settings and change your maximum amount of lives from 3 to 5. You can also turn on select level. This will allow you to choose any level that you have reached. I would also recommend holding down the
button instead of pressing the
button because it shoots faster.