J430,
This Australianism initially confused me, too.
Down here, the "dam" is both the structure that retains water behind it AND the body of water that would be called elsewhere the "reservoir."
Instructor: Just head for the dam.
[Crosshair turns aircraft to point at concrete structure.]
Instructor: The dam!
Crosshair: I am!
[Instructor grumbles.]
This, plus the fact that many "lakes" contain no water, can confuse the North American flying VFR here.