a boat made by hollowing out a log.
Baseball. a roofed structure enclosed on three sides and with the fourth side open and facing the playing field, usually with the floor below ground level, where the players sit when not on the field.
a rough shelter or dwelling formed by an excavation in the ground, in the face of a bank, in the side of a hill, etc., especially one used by soldiers.

1715–25, Americanism; noun use of verb phrase dug out

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World English Dictionary
dugout (ˈdʌɡˌaʊt)
1.  a canoe made by hollowing out a log
2.  military a covered excavation dug to provide shelter
3.  slang a retired officer, former civil servant, etc, recalled to employment
4.  (at a sports ground) the covered bench where managers, trainers, etc sit and players wait when not on the field
5.  (in the Canadian prairies) a reservoir dug on a farm in which water from rain and snow is collected for use in irrigation, watering livestock, etc

Collins English Dictionary - Complete & Unabridged 10th Edition
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Word Origin & History

"canoe," 1722, Amer.Eng., from dug, pp. of dig + 'out. Baseball sense is first recorded 1914, from c.1855 meaning of "rough shelter."
Online Etymology Dictionary, © 2010 Douglas Harper
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Example sentences
Dugout canoes are used to transport fresh goods to the market.
Six dugout canoes and the two larger pirogues were loaded with supplies and
About five thousand people came down to the waterfront to greet me, including a
  load of people in traditional dugout canoes.
Boats traveling the river range from dugout canoes to large freighters.
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