This was the dam that Cosmo, as Super Not-Cosmo, sealed just as it was about to burst. It is beside of the Dimmsdale Volcano which is directly inside it. It is also directly next to Downtown Dimmsdale which is a great danger to the city. Nothing is so much special about it but after a few hours, it broke and the people of Dimmsdale blamed Cosmo and told him to just "sit in the corner" which caused him to run away from home.
This dam earlier appeared in Nega-Timmy. When Denzel Crocker was acting as tour guide in this episode, he said the dam was built in 1948. Timmy as Nega-Timmy planned to activate Mt. Dimmsdale as a volcano by hitting the top with a satellite he would bring down with his Super Deadly Evil Laser, which would then destroy the dam, creating a wave that would destroy the Dimmsdale Make-Up Factory and destroy social life in Dimmsdale. Here the dam could not be destroyed by any natural disaster except a huge lava flow, but there were unlikely odds of that happening until the erupting Mt. Dimmsdale destroyed the dam with its huge flowing lava.
The dam appeared finally in Fairly OddPet, when it was moved to Timmy's House as a result of one of his wishes. It was destroyed again, which engulfed most of Dimmsdale in water, as a result of the disaster caused by Sparky.