It all dates back to 31st of October 1517, the date that the monk Martin Luther is believed to have nailed his 95 theses to the door of All Saints' Church in Wittenberg, This year therefore marks the 500th anniversary of this important date in the history of Christianity, an event thought by many to have sparked the Reformation.
The day is normally celebrated by the German states in eastern Germany (interestingly, it is also a public holiday in Slovenia and Chile!), though the public holiday has been extended to all German states on a one-off basis this year in commemoration of the 500th anniversary. On top of that, the 1st of November is also a public holiday in the predominantly Catholic states in south and south-west Germany, which is why a lot of Germans are currently enjoying two public holidays in a row.
I did a translation about Martin Luther's life last year, which was really fascinating. BBC iPlayer also has an excellent two-part German drama about his role in the Reformation if you are keen to learn more.