Self Reset?

I was listening to music off of my iPod 5th gen and my earbuds started to get a little glitchy with the music, and then the music started cutting out. I figured it was just a random glitch in the system, so i turned off my iPod and turned it back on. When it turned on, it went back to the factory setup, showing the lockscreen wallpaper as the white background with the "Hello" It factory reset itself when i restarted it, asking me to go through the setup again. But the weird thing is that it still kept my password for the lockscreen on the iPod, so is it like a mixed factory reset or what?

I also bought this iPod from a freind who I am no longer friends with anymore, and i have no way to log back into it because he never gave me or erased his iCloud information off of the iPod

Can anyone help?