This is the 56th most frequent German word.
dieser
"This" or "that" (demonstrative pronoun/adjective).
The word 'dieser' is used here as a demonstrative pronoun to specify which dog is being referred to.
Dieser Hund ist sehr freundlich.
This dog is very friendly.
'Dieser' in the dative case is being used to specify the noun 'Idee' which is related to the preposition 'mit'.
Mit dieser Idee können wir das Problem lösen.
With this idea, we can solve the problem.
'Diesen' serves as an accusative demonstrative pronoun modifying the direct object 'Kuchen'.