Some copied info from the internet on digging from:
http://www.mydog8it.com/behavior.htm
Why Do Dogs Dig?
There are several different reasons why a dog will dig:
COMFORT. Dogs will dig to create a cool and comfortable spot to lay. The ground is cooler a few inches below the surface, so a dog may dig down to create a place to cool off. Also, if your dog doesn't have a soft place to lay, he may dig to mold the ground to fit his body, making a more comfortable resting spot. It's not abnormal for a dog to dig several different pits around the yard - he'll want to be able to lay in the shade, so as the sun moves, he'll move to a different spot.
SOLUTION: Provide your dog with soft, cool bedding in a spot that's always shady. Or try making him a digging pit. It's much easier to teach a dog to dig in a certain spot than it is to teach him to stop digging all together.
CURIOSITY. Dogs will dig if they smell or hear something underground - they'll want to check it out. Maybe there's a small animal or insect burrowing, or something is buried underground - either way, this is simply curious digging. Breeds such as terriers and hounds that have been bred to hunt, track, and burrow after their prey are especially prone to this type of digging. It's not your dog's fault! They were designed to do this.
SOLUTION: Watch your dog when he's out in the yard. If you catch him digging a tunnel to the center of the earth, say "NO" and then give him something else to do. (Playing fetch, chewing on a toy, entering tracking competitions, etc.) Occupying his mind and keeping him busy are the best solutions.
BOREDOM and loneliness can also cause dogs to dig. If your dog is left alone for long periods of time, he may be digging because he has nothing else to do, or he may suffer from separation anxiety. All dogs are pack animals, living in families. When you are away, they're lonely and must be provided with plenty of toys to keep them occupied.
SOLUTION: Spend more time with your dog, and give him plenty of things to do while you're away. Giving him a different toy or bone each day when you leave may help. Exercising him regularly, including daily walks, may help tire him out and will allow him to get rid of all that excess energy in an acceptable way. In some cases, having another doggie friend around can help, too. See your vet for more info on separation anxiety.
GROOMING. Dogs dig as a natural way to keep their nails trim. Make sure you trim your dog's nails weekly. If they start to get too long, he may just take matters into his own paws and file them down with your lawn.
FUN. Some dogs (like mine) are just sure they really can tunnel their way to the other end of the earth and won't stop until they do. I've given up the battle and they're allowed to keep one hole in the yard. The good side: Having this one hole to dig in seems to keep them happy and they leave the rest of the yard alone. I can even tell them to "go dig in your hole" and they trot right over to it.