.. How should I deal with the dam?

You can't take the dam apart with your bare hands.

You'll need to use tremendous force.

Or at least create a tremendous force.

An explosion would be in order here.

To create an explosion, what would you need?

Something explosive and something to create a spark.

Gunpowder's explosive.

Why don't you find some?

Where can I find gunpowder?

To blow up the dam, you need to involve the gunpowder.

Place the gunpowder on the dam.

Now, there are two different ways to create a spark.

Think back to campfires or to frying ants on the sidewalk.

Method One (Frying Ants)

Method Two (Campfires)