Squidward uses it to bulldoze Sam and Patrick after Sam completely destroys his house. Despite SpongeBob's resolutive obstruction, Squidward disregards it and puts SpongeBob down. As Squidward is about to win, Sam's strong nature is able to smash the bulldozer and throw it over to SpongeBob's house, destroying both in the process. SpongeBob by this is angered and worried about Sam's strong emotions.
Squidward has a completely different bulldozer in season 7.