The hole may be under his dog house, at the side of your house, or under your porch, rarely does he choose to position himself in the middle of the yard. Dogs are social animals, and if they cannot be with you, they will be as close to you as possible. Hence, they may take up residence under the porch or at the side of the house by the door. Sometimes they'll dig a nice hole by a window or some other place where they can hear their people inside. If your dog digs a few big holes and lies in them, he is probably digging for shelter.
Dogs are pack animals and have a high pack-drive.
They have a strong need to be included in the family. Going outside to feed and visit your dog for 20 minutes a day is not including him in the family. Digging is a natural and enjoyable activity for a dog. If they have a lot of unused energy from lack of exercise, digging is one way they can use it up. But some dogs who dig for pure enjoyment do not lack exercise, they simply love the smell of the earth, the feel of the dirt, and the pleasure of digging.