Originally from the Sarah Silverman program. Said when something is so obvious that it's right in front of them but they still won't get it... Derived from when Steve had a dot on his nose and he didn't notice it
You have a dot on your nose. You cant get any more dot-nose than that!
To not realize something that's so obvious, that it's as obvious as an actual dot on the end of one's nose. When something is so super-obvious, but someone is totally unaware of it, it's a total dot-nose situation.
Dude, you've got wet shit all over your shoes, do you have any idea how dot-nose you're being!?
Steve: Can you help me? I can't find the definition of this word.
Brian: That's sounds like a very dot nose situation to me.
Stev: What?
Brian: Oh, I'm just saying that it's extremely obvious what you should do if you can't find the definition of a word.