This area has only two stages and you must go through both of them in order. Bombs have been set up in order to destroy the dam. You must get into the water and disarm the bombs, but to get to the water you have to go through the dam up to the rooftop.
Inside the dam
This level, while not as short as the previous ones, is still relatively short. The dam has only three storeys. You will encounter a few minibosses on the way (NES only). To the far right of the third storey is a full pizza, though you must fight a miniboss to get it (miniboss on NES only). After you exit the level, walk to the right until you encounter a break in the railing and take the plunge into the water.
In the water
Immediately to the right you will encounter a bomb. Be careful not to get hit by the electricity on the way. (Huh? How can electricity be conducted in a narrow arc underwater like that?) As you proceed to the right you will encounter coral-like thingies. These will automatically kill you if you get too close (what a cheap shot!)