On the third mission, "Foundry", you'll notice five little circles in the upper right corner of your HUD. These are your Combat Ratings. These fill up each time you kill a bunch of demons. When a circle fills up, you get weapon upgrade points, which can be used to upgrade your mods.
Finding certain collectibles can also grant you extra weapon points.
The 3 upgrades for the Explosive Shot:
- Speedy Recovery (costs 1 point): Reduces recharged time between explosive shots
- Bigger Boom (costs 3 points): Expanded explosion radius
- Instant Load (costs 5 points): Reduces loading time for modification
Purchase all three upgrades and you'll unlock the Mastery challenge, which requires you to kill 20 Imps (the little guys) at point-blank range using the Explosive Shot.
Do this 20 times to unlock your achievement, and you'll have a neat little addition called "Cluster Strike" that increases splash damage when you use the Explosive Shot.
Please state any issues before downvoting, and Happy Dooming!