The word "dude" does not officially refer an infected hair on an elephant's butt. That particular definition of dude is used as slang and is largely perpetuated as an urban legend or myth.
The origin of the word "dude" is attributed to New York City slang; it originally referred to a fastidious man who is very concerned with his appearance, grooming and manners. The most common definition of "dude" is simply a general form of address referring to a man, a woman or a group. In western U.S. slang, it also refers to a city dweller who has come to vacation on a ranch.