Dam, sometimes when I look at my friend's head, I say, "Dam, that's a dam big head, Nick." Then he is like, "Dude, that's a literal dam."
Literal Dam
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Explain Bear
Alright, listen up, buttercup. This "joke" is all about a pun, which is like, a play on words. See, the dude says "dam" 'cause his friend Nick got a big head. But Nick ain't too bright, so he thinks the dude is talking about a real water dam, not just using "dam" as a way to say "damn".