The back of my upper arm is in pain only when i extend it out. if i hold it with hand than extend it doesn't hurt. is it nerve or muscle pain?

"Active vs passive: range of motion". When you actively extend or flex a limb, the muscles, joints and tendons are working to allow this movement. When you use your hand to passively flex or extend, there is much less stress and strain on them. The nerves carry pain signals to the brain and, in turn, you feel pain. So it's a bit of both. However, it doesn't sound like the nerve itself is the source of the pain.

Muscle strain: The description suggests the pain is from a muscle strain. If it was nerve pain the pain would be continuous and wouldn't be relieved by supporting the arm with your other hand. This is usually a temporary condition brought on by unusual exertion of the involved muscle(s). If the problem persists or worsens please see a physician for a precise diagnosis and treatment.